Regulation
Another Victory for Ripple! Court Rejects SEC’s Excessive Cybersecurity Regulatory Power
The ongoing XRP lawsuit has highlighted another significant setback for the U.S. SEC, underscoring the challenges it faces in asserting its regulatory authority. The SEC’s latest defeat in Solar winds case occurred when a federal judge rejected his attempt to regulate corporate cybersecurity controls. A prominent lawyer criticized Gary Gensler’s leadership and this recent defeat, marking it as an example of the SEC’s overreach.
SEC’s push for broader oversight hits a brick wall
For years, the SEC has supported expanding its regulatory power over all internal controls of public companies, including cybersecurity measures. However, U.S. District Judge Paul A. Engelmayer recently ruled against this expansion, saying it would give the SEC overly broad regulatory power.
Judge Engelmayer’s ruling emphasized that the SEC’s authority should remain limited to financial controls and not extend to all internal security measures. He noted that accepting the SEC’s argument would allow the agency to regulate areas far beyond its intended scope, including background checks, storage locks, water park security measures and password configurations.
A great relief for companies!
The ruling has many companies concerned about regulatory penalties for cyberattacks, especially in light of the 2020 SolarWinds hack, in which Russian hackers infiltrated the company’s software to gain access to federal agencies and major tech companies.
Legal minds speak out
Prominent attorney and SEC critic James Murphy, known as MetaLawMan on X, has been particularly vocal in his criticism of SEC Chairman Gary Gensler. Murphy has called for a reconsideration of funding for SEC initiatives, gaining support from the XRP community, which has long questioned the SEC’s regulatory approach. The ongoing XRP lawsuit, surrounded by speculation about its outcome, adds to the scrutiny of the SEC’s actions.
Keeping Your Head Up Amidst the Chaos
Meanwhile the defeat in SolarWinds Case highlights the challenges the SEC faces in enforcing its regulatory agenda. It raises questions about its strategies and leadership under Gary Gensler. Ripple CEO Brad Garlinghouse expressed optimism that the lawsuit would soon be resolved, although he did not provide a specific timeline.
As the XRP lawsuit continues, the SEC’s methods and leadership remain critical topics of debate within the cryptocurrency community and beyond.