SEC Commissioner Sounds Alarm: Ripple Settlement Leaves Regulatory Black Hole

Another day, another crypto regulatory gray zone—just how Wall Street likes it.

SEC Commissioner warns Ripple’s landmark settlement could carve dangerous loopholes in digital asset oversight. The ’regulation by enforcement’ playbook hits another snag as courts and regulators clash.

Funny how these gaps always seem to benefit the guys moving billions while retail investors hold the bag.

Crenshaw says the U.S. SEC’s settlement with Ripple could create a regulatory gap 

SEC’s Crenshaw slams Ripple settlement, warns of ‘regulatory vacuum’ #Norque #NOQ #Bitcoin #ETH #AI #Blockchain #Blockchain #Law #Policies #Regulation #Crypto

— NORQUE-NOQ (@NorqueNoq) May 9, 2025

Crenshaw criticized the proposed SEC-Ripple settlement, warning it could harm investor protections and weaken crypto regulation by creating a regulatory vacuum. The Commission and Ripple submitted a settlement that included dissolving an injunction and returning to Ripple roughly $75 million from escrow.

The Commissioner also claimed that the settlement undermined the U.S. SEC and its enforcement program because it subverted the clear and honest application of the facts to the law–a cornerstone of any effective law enforcement program. She added that even if the Crypto Task Force re-wrote registration rules for crypto securities in the future, that did not somehow alter the rules that were in place at the time that Ripple violated them.

“We are today accepting a diluted settlement that erases the investor protections we already won, based on a non-existent framework that may or may not come to fruition potentially years from now…This creates a regulatory vacuum with no end in sight.”

–Caroline Crenshaw, Commissioner at the U.S. SEC

Crenshaw argued that by allowing Ripple to continue operating without admitting wrongdoing or significantly altering its behavior, the U.S. SEC may have set a precedent that weakened its regulatory position and could ultimately harm investors in the long term.

Pierce expresses doubt about the terms of the settlement 

U.S. SEC Commissioner Hester Peirce (Crypto Mom) also expressed skepticism about the terms of the settlement, claiming that the SEC’s actions against Ripple had caused uncertainty in the crypto market and could have far-reaching implications for the industry as a whole. She was particularly concerned that the agency’s approach to regulating crypto was ‘stifling innovation’ and driving projects overseas.

Peirce called for more transparency from the U.S. SEC when it came to regulating the crypto market. She stated that clear guidelines were essential for companies operating in the space to comply with regulations and avoid costly legal battles. 

Peirce’s criticism of the proposed settlement highlighted the ongoing debate within the agency about how to approach crypto and blockchain technology. The U.S. SEC’s enforcement actions against Ripple were being watched closely by the crypto community as they could set a precedent for how the agency regulated other digital assets. 

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