Congress Should Seriously Consider Magistrate Sarah Netburn’s Criticism on SEC’s Behavior in Ripple Lawsuit 

The recent slapdown of the SEC by Judge Netburn calls for Congress to investigate the agency’s allegiance.

The Securities and Exchange Commission (SEC) has recently adopted measures to clamp cryptocurrency activities down.

The agency’s approach of using the enforcement by regulation tactic to regulate the crypto space has been widely condemned by cryptocurrency enthusiasts.

Judge Netburn Slams SEC’s Behavior

In an interesting development this past week, as reported by TheCryptoBasic, District Judge Sarah Netburn slammed the SEC’s behavior in its lawsuit against blockchain company Ripple.

The SEC has launched several efforts to ensure Ripple does not lay hands on Bill Hinman’s document, which resulted in the formulation of the 2018 controversial Ethereum (ETH) free pass speech.

The Securities and Exchange Commission saw its recent claim of attorney-client privilege over Hinman’s document denied by Judge Netburn.

Magistrate Netburn criticized the SEC’s moves to withhold an essential document that could potentially aid Defendant’s Fair Notice Defense. The judge slammed the SEC’s behavior in the Ripple lawsuit, which impugns the agency’s allegiance to the law.

“The hypocrisy in arguing to the court, on the one hand, that the speech is not relevant to the market’s understanding of how or whether the SEC will regulate cryptocurrency and, on the other hand, that Hinman sought and obtained legal advice from SEC counsel in drafting his speech, suggests that the SEC is adopting its litigation positions to further its desired goal and not out of a faithful allegiance to the law,” an excerpt of the court’s ruling reads.

SEC Ignoring Calls to Provide Clear Regulations for Cryptos

Prior to Judge Netburn’s comment, the SEC had been criticized by various cryptocurrency experts for its tactics toward regulating the nascent industry.

Industry players have called on the SEC to provide clearer regulations for crypto to avoid breaching United States securities laws. The agency has ignored these calls, saying its regulations are clear enough for crypto projects to adhere to.

However, when companies launch products based on their understanding of the law, the agency is always quick to file charges against the firms and their offerings.

The Ripple lawsuit perfectly illustrates the unclear regulations for the cryptocurrency space.

Congress Should Question SEC’s Allegiance

While crypto players have seen their criticism of the SEC ignored, it is expected that policymakers should take Magistrate Netburn’s recent slapdown of the agency’s regulatory approach seriously.

With Judge Netburn questioning the SEC’s allegiance to the law, chairwoman Maxine Waters of the House Financial Services Committee should focus on this comment in the SEC’s Enforcement Division oversight hearing.

The SEC needs to publicly declare where its allegiance lies – the public and the law, or its common interest – in a hearing scheduled to be held tomorrow.

#XRPCommunity #XRP From @ss_friedman looking for tough questions at the House Financial Services Capital Markets Subcommittee hearing on the SEC's Division of Enforcement on Tuesday, July 19, 2022 at 10:00 a.m. https://t.co/Fd1H7VpxvD

— James K. Filan ???? 106k (beware of imposters) (@FilanLaw) July 17, 2022