The legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is widely considered the most important precedent for the crypto industry. If SEC Chairman Gary Gensler and his agency prevail in the case, the crypto industry can expect an even tougher crackdown from the U.S. regulator. However, the motives could be highly questionable.
Back in July last year, CryptoLaw, a platform launched by attorney John E. Deaton, published eye-opening revelations about Gary Gensler. Deaton revealed with the so-called “Gensler Files” that the SEC chief may be acting in the interests of others.
At the time, it came to light that Gensler had assets of more than $100 million in funds, which are mainly managed by Vanguard Group, through two key companies, including: Annabel Lee LLC and Marital Trust. And while Gensler’s public schedule shows no notable meetings with crypto-related companies, he showed at least seven meetings with Vanguard Group.
And that conflict of interest is currently still evident. At a time when not only Ripple is battling the SEC, but the entire industry is facing an “Operation Choke Point 2.0,” Gensler’s favoritism toward Wall Street giants is more evident than ever.
Fox Business journalist Eleanor Terrett reported that the September edition of Gary Gensler’s public calendar was added to the SEC website yesterday. Highlights include four meetings with CFTC Chairman Rostin Behnam, two meetings with former SEC General Counsel John Coates, as well as meetings with Vanguard Group, the ambassador for China Nicholas Burns and Black Rock.
“It’s important to note that Vanguard Group manages Gensler’s personal fortune of $100M and he has given them excessive access to his office since he became SEC Chair,” Deaton commented.
— CryptoLaw (@CryptoLawUS) February 21, 2023
Why Is The SEC Cracking Down On Ripple And Crypto?
Just recently, Deaton theorized about why the SEC is cracking down on Ripple and the entire crypto industry. According to the attorney, Gensler will continue its policy of regulation through enforcement until Wall Street giants like Vanguard are satisfied.
[…], once the legacy players are satisfied, there will be some form of clarity worked out and then, crypto will be labeled safe enough and investors ‘protected’.
As Deaton explained, Wall Street giants are generally bullish on crypto. Larry Fink, the head of Black Rock, the world’s largest asset manager, recently said that technology “will play a big role in the modern world.” Moreover, he emphasized that there needs to be reasonable regulations for crypto. Deaton drew the following conclusions:
If BlackRock is in, ask yourself who is the largest shareholder of BlackRock? Vanguard.
Who manages 90% of Gary Gensler’s $140M fortune? Vanguard.
The point is that Crypto is here to stay. BlackRock, Fidelity, Mellon, etc, are not all wrong.
Ripple could thus serve as a precedent for the SEC to regulate cryptocurrencies so that the U.S. agency gains oversight over all tokens, ideally including all transactions on the secondary market. victory for Ripple against the SEC seems more important than ever in light of these revelations by Deaton.
At press time, the XRP price stood at $0.3906, down 2.6% in the last 24 hours in the wake of the market-wide correction.