Gary Gensler, whose tough stance on cryptocurrency has left both industry executives and ordinary investors in fear, has finally departed—and the bullish momentum has started to return strongly.
XRP, which has been the subject of a fierce legal dispute between issuing company Ripple and the SEC since December 2020, appears to be the biggest beneficiary of Gensler's departure. The lawsuit, filed during the tenure of Jay Clayton, who was appointed by Trump and continued under Gensler, alleges that Ripple's sale of XRP constitutes unregistered securities offerings and requires the company to pay a penalty of $1 billion.
Since then, Ripple has been embroiled in a lengthy and exhausting legal battle that has cost the company over $100 million, according to CLO Stuart Alderoty. In July 2023, Ripple won a partial victory when Judge Analisa Torres ruled that XRP is not a security when sold to the public on exchanges, but could be classified as such when offered to institutional investors. The judge also reduced the penalty against Ripple from $1 billion to $125 million.
In October 2023, the SEC dropped the lawsuit against Ripple co-founders Brad Garlinghouse and Chris Larsen but opposed the penalty amount imposed by the judge.
Now, with the fearsome SEC chair soon to depart, Ripple's tough battle with this agency may be nearing its end. If this happens, it is likely to pave the way for an XRP ETF and Ripple's IPO, which has been delayed due to the company's legal troubles.
Gensler's departure is clearly understood by the market as a bullish signal, causing XRP's price to surge 8% on Thursday. This latest increase adds to a 50% rise over the past week and a 120% growth over the past month.
At the time of writing, XRP is trading at $1.26, the highest level in the past three years recorded in September 2021. However, some traders predict that an even more impressive rally may be on the horizon.
Cryptocurrency chart analyst and XRP speculator Dark Defender on Twitter/X has set a price target for XRP at $1.88 if this altcoin breaks through the small triangles of the bullish flag pattern.
Meanwhile, CrediBULL Crypto expresses confidence that XRP will outperform BTC and ETH in the near future, forecasting a new all-time high to come 'sooner than most people expect.' In response to the portal, this trader added that a $9 level would be 'magnificent.'
Gary Gensler will resign as SEC Chair on January 20, when Trump officially takes office after the inauguration. During his campaign, Trump was transparent about his plan to fire Gensler from day one, receiving enthusiastic support from the cryptocurrency community.
Technically, Gensler's term is set to run until 2026, but officials at this agency often resign when a new administration takes over.
"I thank President Biden for entrusting me with this great responsibility. The SEC has fulfilled its mission and enforced the law without fear or favoritism," Gensler said in a statement on Thursday.
This announcement was celebrated with a champagne party on Crypto Twitter, with many industry supporters reacting with memes and jokes.
Ripple CEO Brad Garlinghouse posted a sarcastic note that Gensler's departure is the first thing on his list of things he is grateful for this Thanksgiving.
Elon Musk also reacted to this announcement, asking Gensler whether the SEC only works one day a month in the office. This tech mogul has clashed with the SEC multiple times and has recently become a staunch ally of Trump, who has proclaimed Musk as his pick to run a new agency called the Department of Government Efficiency, or DOGE.
Hayden Adams, founder of the largest decentralized exchange Uniswap, reacted by sharing an animated X-Men image titled 'Evil, go away!' With Gensler's departure, Adams and the Uniswap team can now breathe a sigh of relief: in April, the SEC issued a Wells notice to this platform, indicating that enforcement action could be underway.
Meanwhile, industry leaders are seeking a seat on the cryptocurrency advisory council, which Trump has promised as part of his cryptocurrency-friendly administration. This council is likely to be placed under the White House's National Economic Council and will include top executives from U.S. cryptocurrency companies. According to Reuters, some positions have already been filled by representatives from venture capital firms, specifically Paradigm and the cryptocurrency branch a16z of Andreessen Horowitz.
While many cryptocurrency executives are looking for ways to step into the White House, the SEC chair position remains vacant. Trump has yet to officially announce his choice for the agency's director position, but several candidates for the role have emerged.
One of them is Dan Gallagher, who was an SEC lawyer under Barack Obama and is now the top lawyer at the stock and cryptocurrency trading app Robinhood. A regular attendee at cryptocurrency conferences, Gallagher has criticized Gensler's approach to the digital asset industry and defended Robinhood's cryptocurrency division against the SEC's Wells notice.
Another candidate who may be chosen for the SEC chair position is SEC Commissioner Hester Peirce, a strong advocate for the cryptocurrency industry against Gensler's tough stance, earning her the nickname 'Crypto Mom'. Republican SEC Commissioner Mark Uyeda is also considered a strong candidate for this position, as he is known for criticizing enforcement regulations against cryptocurrencies.
