Mary Jo White, ex-Chair of Securities and Exchange Commission, while speaking to media outlet Fortune, highlighted her worries about the regulator’s moves against Ripple Labs.
Her opinion echoes the views of two other former SEC executives, Joseph Grundfest and Joseph Hall, who have disputed the market governing institutions actual intention and related actions. White’s statement, however, is notable because she is one among the legal team of Ripple Labs.
The financial technology focused Ripple Labs roped her in June 2018. Interestingly, Andrew Ceresney, an ex-enforcement director at SEC, is also employed by Ripple to fight the lawsuit filed by private investors alleging XRP sales without registration.
In the latest interview, White, highlighting Ripple’s defense strategy, has stated that the SEC has made a blunder by filing case on Ripple Labs for supposedly offering unregistered securities.
She said “There’s no way to sugarcoat it. They’re dead wrong legally and factually.”
White also pointed out that the SEC filed the case a day before Christmas and before the exit of Jay Clayton, former Chairman.
She pointed out:
“As a former U.S. attorney and SEC chair, you know that when it takes that long to figure out a case you probably shouldn’t be bringing it. It’s not something I would do walking out the door.”
Additionally, White also asserts that the SEC’s argument is diverting as XRP was not offered as a speculative investment vehicle to basically make the founders rich. Furthermore, she states that the SEC’s battle has caused the Howey trial being utilized to enforce conventional laws that does not suit latest technological developments. As per White, the regulator is “trying to fit a round peg in a square hole.”
In line with Hall and Grundfest, White blames the SEC of failing to safeguard small investors through its strict measures and in fact troubling their interests. The SEC’s actions, as per White, have resulted in a loss of $15 billion in the form of market cap. If that was not enough, categorizing Ethereum as a non-security indicates the level of inconsistency of the market watchdog.
White signaled that “while the outcome of the lawsuit is uncertain for now, […] resolution could come as early as October in the form of a summary judgment from a federal court”. In addition, Fortune goes on to cite White as also suggesting “that the two sides could reach a settlement before then—one that could lift the legal cloud over Ripple, while also providing broader guidance to the cryptocurrency industry.”
White also revealed that Ripple Labs is confident that the current SEC Chairman Gary Gensler, who “is an authority on cryptocurrencies” will probably look into the lawsuit personally:
“You have scarce resources [as chair], and you have to pick your spots. The crypto-landscape is a critical one, and there’s a crying need for clarity.”
