Advocacy for a Process-Oriented SEC, Not Arbitrary: Insights from a Crypto Lawyer
Key points:
Murphy said the SEC should be process-oriented.James Murphy thinks the SEC was wrong with its approach to crypto regulation.He thinks the upcoming election can impact the final decision between XRP and SEC.
According to James Murphy, founder of MetaLawMan, the U.S. Security and Exchange Commission (SEC), under Gary Gensler, was wrong with its recent approach to cryptocurrency regulation. In a recent Thinking Crypto podcast, Murphy told the host, Tony Edward, that the SEC was arbitrary in its approach to regulatory enforcement.
Murphy noted that the SEC should be process-oriented, where new laws take time to get input from the industry. He explained that such laws, when put out, are expected to attract comments that should be considered when developing the final rules.
The experienced lawyer cited instances where Gensler went around the process and initiated enforcement when the SEC did not have explicit authority. He considered such an unusual move, noting it as the wrong approach. Hence, it has led to situations where the Court reverses the SEC Chairman’s decisions, insisting he follows the law.
Commenting on the ongoing case between the SEC and Ripple, Murphy noted that the Court’s ruling that XRP is not a security is correct. He explained that buying XRP does not imply investing in Ripple and does not offer the buyer any stake in the company. According to him, users purchasing the cryptocurrency align their interests with the project.
Furthermore, Murphy downplayed the significance of the recent remedy discovery granted to the SEC. He noted that it would only open the opportunity for more debate and is subject to the judge’s final decision.
However, the MetaLawMan founder envisaged a scenario where the SEC would request that Ripple pay a fine above $728 million, the volume of transactions not covered by the non-security classification. Murphy favors an appeal to such a settlement, considering that it is an election year that could change the direction of the SEC.
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