SEC Under Gensler Faces Criticism and Legal Challenges Over Ripple and Crypto Actions

The SEC, under Chair Gary Gensler, faces criticism and legal challenges over its enforcement actions, particularly in the cryptocurrency sector. Critics, including Ripple executives and legal commentators, accuse the SEC of overreaching and acting outside its legal authority, as evidenced in cases like the DEBT Box and Ripple, with judges admonishing the agency for a "gross abuse of the power" and lacking "faithful allegiance to the law". In the Ripple case, the SEC's main arguments were rejected, except for the failure to register investment contracts with a small group of institutional investors, leading to a demand for 300+% in remedies. This has sparked accusations of the SEC's motivations being driven by spite rather than investor protection. Meanwhile, Ripple's Chris Larsen has been accused of selling over $729M in unregistered securities, with the SEC seeking $2B in punitive damages, a move defended by some as necessary for consumer protection. Critics also label the SEC as "unhinged" and claim it is dragging the US further behind other G20 countries.