Blockchain Association Chief Policy Officer Jake Chervinsky has insinuated in his new paper that Gary Gensler needs to step aside from making decisions regarding regulatory actions.
According to Chervinsky, the SEC chair Gensler has wrongly prejudged all digital assets as securities. Consequently, he is required by federal law to “recuse himself” from decisions regarding the enforcement of all digital assets.
In a Twitter thread, he continued by saying that the Wells process is supposed to be the base of all enforcement actions taken by the Commission. He further pointed out that SEC commissioners are meant to be impartial in their assessment of evidence brought by SEC staff.
“the SEC Commissioners are meant to act as neutral arbiters, impartially weighing the evidence and arguments presented by SEC staff (the prosecutors) and the enforcement target (the defendant),” he said.
He continued by saying Gary Gensler is far from being a neutral arbiter since he has continued to refer to all digital assets besides Bitcoin as securities since his appointment.
3/ When it comes to digital assets, Chair Gensler is far from a neutral arbiter.
Since his appointment, he has repeatedly stated his view that all digital assets other than bitcoin are securities, end of story.
We list many of these statements in our paper.
— Jake Chervinsky (@jchervinsky) June 29, 2023
According to the Association, this approach demonstrates a preexisting bias that may jeopardize the right to due process of those under investigation.
Also Read: Lawyer Stuart Alderoty Brings SEC Impartiality to the Spotlight, showing potential inconsistencies
Furthermore, Chervinsky says that the refusal of Gary Gensler to recuse himself will “taints the entire enforcement action.” In addition, he pointed out that Gary Gensler in the past had already voted on many regulatory actions regarding crypto assets, and those enforcement actions should now be “invalidated” and that Gensler should be disqualified from future votes.
8/ Chair Gensler has already voted on many enforcement actions involving digital assets.
He should have recused himself then.
Since he didn’t, those enforcement actions should be invalidated now, and he should be disqualified from voting on any more in the future.
— Jake Chervinsky (@jchervinsky) June 29, 2023
Ripple Legal Counsel Stuart Alderoty reacts
In reaction, Ripple Labs Inc legal counsel, Stuart Alderoty calls for accountability in the United States SEC. In his response, he noted that Gary Gensler’s statements have “legal consequences” and that the Commission should be held accountable.
Aldroty joins his voice to many big names in the industry who has been calling for accountability in the Securities and Exchange Commission as there is an obvious conflict among the regulators’ leadership.
