Attorney Gerard Scimeca, Chairman of Consumer Action for a Strong Economy (CASE), has voiced his concerns regarding the U.S. Securities and Exchange Commission’s (SEC) approach to crypto regulation. Scimeca’s criticisms center on SEC Chairman Gary Gensler’s handling of crypto-related matters, particularly in differentiating between legitimate crypto businesses and fraudulent enterprises like FTX and Celsius.
Scimeca’s critique
Scimeca’s critique of Chairman Gensler’s regulatory approach came to light during an episode of the Thinking Crypto Podcast hosted by Tony Edward. During the podcast, Scimeca and Edward delved into what they refer to as “dirty FTX secrets,” shedding light on their perspective regarding Gensler’s actions within the crypto space.
Scimeca’s primary contention revolves around what he perceives as Gensler’s failure to provide clear and consistent regulations for the crypto industry. He argues that this lack of regulatory clarity has left the crypto industry “in a state of limbo,” creating uncertainty for both businesses and token holders.
To illustrate his point, Scimeca pointed to the example of environmental, social, and governance (ESG) regulations, where companies have invested significant resources to comply with regulatory frameworks.
Lack of clarity regarding Ripple Labs
Another issue raised by Scimeca is the SEC’s handling of its interactions with Ripple Labs, the blockchain company behind the cryptocurrency XRP. Scimeca contends that the SEC failed to provide adequate clarity in its dealings with Ripple, leaving the company in a state of ambiguity.
He highlights that the SEC brushed off Ripple’s requests for clarification before abruptly launching legal action against them. This inconsistency in communication and enforcement, according to Scimeca, has created an environment of uncertainty within the crypto industry.
Gensler’s focus and contrasting examples
Furthermore, Scimeca brought attention to the case of Sam Bankman-Fried, the founder of the now-defunct FTX crypto exchange, who is currently facing fraud trials in the United States. Scimeca emphasized that Bankman-Fried, at the age of 31, entered into a significant deal with the U.S. financial giant Goldman Sachs.
Scimeca used this example to draw a sharp contrast between Gensler’s focus, implying that the SEC chairman appears to be targeting companies like LBRY and Ripple while potentially overlooking fraudulent firms like the now-bankrupt FTX. He stated,
“It’s just very interesting that this is the guy ‘Sam Bankman-Fraud’ that is picking people’s pockets in broad daylight, and Gensler is going after LBRY and Ripple.”
