Ripple Labs CEO says former FTX CEO Sam Bankman-Fried’s meetings with US Securities and Exchange Commission (SEC) Chairman Gary Gensler were “embarrassing.”
In response to a Wall Street Journal op-ed questioning Gensler’s failure to foresee the FTX collapse, Brad Garlinghouse says it was shameful that the SEC chairman was caught off guard by the debacle, even after meeting with Bankman-Fried several times.
“It is ridiculous and downright embarrassing that Chairman Gensler was touting the SEC’s enforcement actions as ‘police on the beat,’ but (according to public reports) he met with [Sam Bankman-Fried] several times, but was caught completely red-handed when the alleged fraud finally came to light.”
The SEC sued Ripple in late 2020 over allegations that the company sold XRP as an unregistered security, but the regulator did not launch an investigation into FTX before the multibillion-dollar collapse.
According to pro-XRP attorney John E. Deaton, the SEC’s enforcement actions may have punished companies that were skirting regulations, but they did not set any precedent or guidelines. It refers to crypto-lending platform BlockFi, which agreed to pay $100 million in fines to the SEC, then went bankrupt months later.
“Everyone should ask Gary Gensler and the SEC what changed when BlockFi accepted and paid $70 million of the $100 million imposed by Gensler? BlockFi was making payments to the SEC for God’s sake. The SEC is the 2nd Largest Creditor in BlockFi Bankruptcy!
But what policies or practical measures were implemented with this agreement? Gensler says come in and talk. BlockFi did it and paid a lot of money to do it. But how did he offer this deal to others? How did this deal protect investors?”
FTX collapsed last month, and Bankman-Fried was subsequently indicted and charged with fraud, mishandling client funds and making illegal campaign donations. He was recently arrested in the Bahamas.
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