Gary Gensler Fails To Anticipate FTX Collapse, Said Ripple CEO Brad Garlinghouse

Chairman of the US Securities and Exchange Commission, Gary Gensler. (Photo; Doc. MarketWatch)

JAKARTA Ripple CEO Brad Garlinghouse called the meeting of the Chairman of the US Securities and Exchange Commission (SEC) with FTX founder Sam Bankman-Fried a shame.

According to him, the meeting that took place several times was connoisseurous' because Gary Gensler often touted regulatory enforcement against the crypto industry. In addition, Garlinghouse also commented on an opinion in the Wall Street Journal which questioned the SEC's failure to predict FTX's collapse.

"It's ridiculous and frankly embarrassing that Gensler's chairman is touting SEC enforcement actions but (according to public reports) meetings with [Sam Bankman-Fried] several times, but was caught red-handed when the alleged fraud was finally revealed," Garlinghouse said.

The SEC sued Ripple by the end of 2020 on charges that the company sold XRP as unregistered security, but regulators did not launch any investigations into FTX prior to its collapse and eliminated billions of US dollars in user funds.

Reported by Daily Hodl, according to pro-XRP attorney John E. Deaton, SEC enforcement measures may have punished companies that avoided regulations, but failed to set any precedents or guidelines. He referenced crypto lending platform BlockFi, which agreed to pay the USD 100 million fine to the SEC, and went bankrupt months later.

"Everyone has to ask Gary Gensler and what SEC changes when BlockFi approves and pays 70 million dollars out of 100 million US dollars imposed by Gensler? BlockFi makes payments to the SEC for God's sake. SEC is the 2nd largest creditor in BlockFi Bankruptcy! said Deaton.

He further questioned the action of Gary Gensler cs who often urged the crypto industry to come to the SEC. In BlockFi cases, Deaton assessed that the SEC did not provide clear guidelines regarding crypto regulation.

But what policies or practical actions are implemented by this settlement? Gensler said go in and out. BlockFi does it and pays a lot of money to do it. But how does this settlement provide guidance to others? How does this settlement protect investors?"

On November 11, 2022, the leading crypto exchange FTX declared bankruptcy. FTX founder and former CEO Sam Bankman-Fried (SBF) was charged with fraud for mismanaging the platform's user funds.

The SBF is also suspected of providing illegal funds for the campaign of political parties in the US. Last week, SBF was officially arrested by the authorities of the Bahamas Islands. The plan, he will be extradited to the United States.