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Legal expert breaks down new SEC chief’s vision on Bitcoin and XRP

  • New SEC Chairman may push for a Bitcoin ETF approval.
  • The case against Ripple and XRP could be affected by new leadership in the regulator.

The revelation of the candidate for the position of Chairman of the United States Securities and Exchange Commission (SEC) has created great hype in the crypto community. As reported earlier today, Gary Gensler could hold the position under President-elect Joe Biden’s administration.

Compound Labs General Counsel (GC) Jake Chervinsky believes that the addition of Gensler to the regulator could have positive implications for the approval of a Bitcoin ETF. The regulator has rejected an ETF based on the cryptocurrency for years on the grounds of manipulation and low security for consumers.

However, Chervinsky argues that Gensler has a career that has allowed him to acquire in-depth knowledge of the market and the major cryptocurrencies. Compound Labs General Counsel stated:

Gary Gensler deeply understands crypto & has strongly supported bitcoin for years. His selection as SEC chair signals a policy shift in favor of a bitcoin ETF.

Chervinsky’s comments have been the subject of much debate in the crypto community. One user stated that the approval of a Bitcoin ETF will not change with a new chairman because of the aforementioned concerns the regulator still has on the crypto market. However, Compound’s GC believes that “the tone” that Gensler will set will make a positive difference, he added:

The concern isn’t so much market manipulation as it is surveillance-sharing agreements with regulated markets, which has come a long way in the last 12 months.

Will it influence the case against Ripple and XRP?

On the other hand, the legal expert also believes that the new SEC president will have a vision that will not favor the progress of the lawsuit against Ripple Labs. In the past, Gensler has said that there is a “strong case” for asserting that XRP is a security under U.S. law.

As reported by CNF, it is unclear what Gensler’s position will be if he is confirmed as the SEC’s Chairman. There is a video about one class given by Gensler in which he states that XRP operates as a “bridge currency”. In addition, he has also referred to Ethereum as a security, despite the fact that the Commodity and Futures Trading Commission (CFTC) considers this cryptocurrency a commodity.

Chervinsky further responded that Gensler later explained that Ethereum’s development had been “more decentralized.” Therefore, it could “get off the hook.” With respect to the referenced video discussing the XRP case, Chervinsky believes that Gensler uses the word currency only “casually” and therefore it cannot be concluded that “there is an exception in securities law.”

It remains, therefore, to judge Gensler’s position on these important issues based on his actions when he is confirmed and takes office.

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