As per the latest report, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), is under investigation by top Republican lawmakers. Representatives Jim Jordan, Patrick McHenry, and James Comer have launched an inquiry into Gensler’s hiring practices, suspecting political favoritism.
Fox Business journalist Eleanor Terrett shared this development on social media, and the crypto world recognizes the seriousness of the situation. The investigation stems from concerns that Gensler may have made personnel decisions influenced by political allegiances rather than merit, potentially affecting the objectivity of the SEC’s regulatory actions.
The investigation alleges that Gensler showed favoritism by hiring Dr. Haoxiang Zhu, the SEC’s Director of Trading and Marketing in November 2021. It alleges that Gensler hired Dr. Zhu based on political leanings and not merit, undermining the regulator’s impartiality.
This inquiry comes at a time when Gensler has faced criticism for his handling of high-profile enforcement cases, including the recently concluded legal battle between the SEC and Ripple.
A Potential Advantage for XRP
The investigation into Gensler’s conduct could provide Ripple and XRP with a potential advantage. The lawmakers leading the inquiry are prominent Republicans, many of whom have expressed skepticism toward Gensler’s leadership.
For instance, Patrick McHenry has previously criticized the SEC for its lack of transparency in its regulatory approach under Gensler. This investigation could lead to increased scrutiny of Gensler’s decisions and potentially weaken his position, particularly regarding the Ripple case. If political pressure mounts, it could push the SEC to reconsider its aggressive stance against Ripple, especially if there are broader concerns about Gensler’s impartiality.
Furthermore, the inquiry raises questions about the fairness of the SEC’s enforcement actions under Gensler’s leadership. Should the investigation reveal evidence of political favoritism in his hiring practices, it could cast doubt on the integrity of the SEC’s decision-making process in other regulatory matters.
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What’s Next for Ripple and XRP?
Ripple already has a partial victory against the SEC in court, and proof of Gensler’s left-leaning shady practices could strengthen the company’s position, and prove that Ripple executives were right all along.
Meanwhile, members of the U.S. Congress have also called out Gensler and the SEC for their unreasonable practices, and the outcome of this investigation could bring a turnaround in the SEC’s practices and regulatory approach.
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