Elon Musk's battle with the SEC has faced criticism from Ripple's legal director, Vivek Ramaswamy, and Chamath Palihapitiya, who accused the regulator of corruption, coercion, and abuse of power.

The ongoing battle between Elon Musk and the U.S. Securities and Exchange Commission (SEC) has sparked new debates about the agency's enforcement tactics, drawing comments from key political and business figures including Ripple's legal director Stuart Alderoty, venture capitalist Chamath Palihapitiya, and politician Vivek Ramaswamy.

Musk shared a letter on his social media platform X on Thursday from his lawyer, Alex Spiro, accusing the SEC of conducting a years-long harassment campaign against Musk and his companies. Spiro claimed the SEC issued a settlement ultimatum within 48 hours, threatening to impose fines or charges, allegedly driven by higher-up directives.

The letter also mentioned a new SEC investigation into Neuralink and a subpoena against Spiro under coercive threats, seeking clarification on whether the SEC's actions stemmed from internal or external influences such as the White House.

Palihapitiya reflected on the broader implications of the SEC's actions, criticizing the agency for using taxpayer resources. He wrote on X:

It's ridiculous. Why does the SEC think they can continue to waste government resources (i.e., our money) so pointlessly?!?!? Without proper checks and balances, partisan officials will continue to use legal warfare to create errors and slow down those they disagree with.

"And if you don't have resources like Elon, you will be in trouble. I hope people understand this corruption," he warned.

Ramaswamy, who was recently appointed along with Musk to lead the Department of Government Efficiency (DOGE), accused the SEC of undermining public trust. "This is the worst part: the SEC frequently loses cases in federal court because they distort their rules in illegal and unconstitutional ways," Ramaswamy wrote, adding that their actions undermine faith in the rule of law.

Ripple's legal director joined the discussion and responded to Ramaswamy:

Ripple has exposed the SEC's lawless tactics from the very beginning. As the court stated in our case: 'The SEC is using its litigation positions to advance its desired goals, not out of loyalty to the law.' The question is not whether the SEC under Gensler has engaged in fraud — it has. The question is how we will hold them accountable.

Meanwhile, a restructuring at the SEC is underway as Gary Gensler prepares to step down as Chairman, signaling a potential shift in the agency's regulatory approach. Gensler, known for his tough stance on cryptocurrency and financial regulations, will leave his position in January 2025. His successor, Paul Atkins, is a former SEC commissioner and a proponent of more lenient regulations, particularly in the cryptocurrency space.

President-elect Trump's nomination of Atkins has sparked debate, with industry insiders predicting a friendlier environment for digital assets while critics warn of lax oversight. The transition process could redefine the SEC's priorities, pending Senate confirmation of Atkins.

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