Cowboy.X (@cowboycrypto313), a crypto enthusiast, recently shared a notable clip from January 2022 featuring Paul Atkins, former SEC Commissioner and current nominee to replace SEC Chair Gary Gensler.
In the clip, he discussed the ongoing legal battle between the SEC and Ripple and the broader implications for Ethereum.
Atkins, speaking about Gensler’s tenure, noted that Gensler’s approach to cryptocurrency has been anything but lenient, despite initial expectations due to beliefs that he understood the workings of the crypto market.
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Listen to potential SEC Chairman appointee, Paul Atkins, discuss the @Ripple law suit in this clip from Jan 2022 where he mentions $XRP.Atkins goes on to discuss the SEC’s views on whether Ethereum is a security or not. pic.twitter.com/SRkSKxDwNb
— Cowboy.X (@cowboycrypto313) December 3, 2024
Instead, Gensler employed an aggressive enforcement strategy through lawsuits. At the time, Atkins noted that this strategy raised questions about how effectively the SEC can pursue these cases, especially if courts oppose its arguments.
The Lawsuit Against Ripple
In his remarks, Atkins addressed the SEC’s lawsuit against Ripple, where the regulator tried to argue that XRP qualifies as a security under U.S. law. He highlighted the broader implications of the case, particularly for cryptocurrency exchanges.
He stated that the SEC did not have jurisdiction over an exchange unless it allowed users to trade securities. This way, if the SEC could label cryptocurrencies as securities, it would then go after the crypto exchanges like it went after Ripple.
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Ethereum’s Status and the Market’s Future
The conversation shifted to Ethereum, where Atkins acknowledged uncertainty about its regulatory status at the time.
He referenced past remarks from William Hinman, former SEC Director of the Division of Corporation Finance, who argued that ETH may have initially been a security but had since morphed into a non-security. While Hinman’s statements were not binding on the SEC, they reassured the crypto market.
However, Atkins noted Gensler’s differing stance, citing his lectures at MIT when he described ETH as a security. This divergence caused uncertainty at the time about how the SEC might proceed under Gensler’s leadership.
Atkins noted that the ramifications of declaring ETH to be a security would have been huge. If the SEC were to classify Ethereum as a security, it could trigger legal challenges, including rescission rights for past ETH transactions. Such a development, Atkins warned, could disrupt the market significantly.
However, Gensler took a different approach, ignoring Ethereum while aggressively pursuing XRP. This did not sit well with the XRP Army, and many speculated on the reasons for this through the ETH Gate conspiracy.
According to most crypto community members, Gensler’s tenure is a failure. Meanwhile, he has announced he will resign on January 20, 2025. This would allow Atkins and the incoming Donald Trump-led administration to properly regulate the nascent industry.
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