SEC Commissioner Crenshaw Disagrees with the Settlement Proposed in the XRP Case
Ripple's legal battle with the US Securities and Exchange Commission (SEC) hit a roadblock when Commissioner Caroline A. Crenshaw publicly spoke against the agency's settlement with Ripple Labs. In her opinion, this agreement threatens investor protections and undermines the SEC's crypto enforcement efforts.
The controversy is rooted in the lawsuit filed against Ripple in December 2020, accusing the company of selling XRP tokens as unregistered securities, thereby violating Section 5 of the Securities Act of 1933. A court partially ruled in favor of Ripple, stating that institutional sales of XRP were unregistered securities offerings, while sales in the secondary market were not.
The settlement requires Ripple to pay over $125 million in penalties and return $75 million in escrowed funds to the company, thereby lifting the injunction that had restricted future XRP sales.
Commissioner Crenshaw, in a strong rebuke, referred to the agreement as a move that "razes" both the civil penalty and the injunction. In her sharp dissent, she argued that this decision subverts the law and does a disservice to investors.
Her opposition hinges on three primary issues:
- Legal Uncertainty: The settlement nullifies the court's injunction, potentially allowing Ripple to sell unregistered XRP again without facing consequences.
- Regulatory Ambiguity: Crenshaw worries that the deal represents a broader shift by the SEC away from crypto enforcement, with no clear framework to replace it.
- Investor Peril: She emphasizes that the deal raises more questions than it answers, particularly regarding investor protections and market clarity.
In addition, her dissent raised fears of an attempt by the SEC to "gut its own enforcement program from the inside out," prioritizing deregulation over legal precedent. Crenshaw urged the courts to oversee the settlement cautiously, warning that such decisions could erode public confidence in the SEC's integrity and mandate.
It's common for SEC commissioners to focus on several key areas in such cases, such as regulatory clarity, consumer protection, market integrity, and future implications. However, without specific details, these areas merely represent common themes that SEC commissioners might address in dissenting opinions. For precise concerns, reviewing official SEC statements or news coverage regarding Commissioner Crenshaw's remarks is necessary.
Read more about the SEC's official settlement agreement in the Ripple XRP case: SEC Files Official Settlement Agreement in Ripple XRP Case
- Commissioner Crenshaw, allegedly, referred to Ripple's settlement with the SEC as a move that "razes" both the civil penalty and the injunction, declaring her opposition to the agreement.
- According to Commissioner Crenshaw, the settlement potentially allows Ripple to sell unregistered XRP again, creating legal uncertainty that threatens investor protections and market integrity.
- In her sharp dissent, Commissioner Crenshaw also expressed concerns about regulatory ambiguity, fearing that the deal represents a broader shift by the SEC away from crypto enforcement with no clear framework to replace it.
- The business technology sector is closely monitoring the ongoing Ripple-SEC legal battle, as Commissioner Crenshaw's opposition raises questions about the SEC's commitment to regulatory clarity, consumer protection, and ensuring investor confidence in future finance and technology ventures.
