Former SEC Chair Behind Ripple Lawsuit Blames Cryptocurrency Exchanges, Not Blockchain

Jay Clayton, the former chairman of the Securities and Exchange Commission (SEC) and the man behind the ongoing Ripple lawsuit, has publicly criticized the behavior of major cryptocurrency exchanges, Binance and FTX, in a recent interview with Bloomberg.

While addressing the recent lawsuits against these platforms, Clayton decried what he labeled as “reprehensible behavior,” but emphasized that this does not reflect poorly on the technology powering these platforms — blockchain.

Earlier this week, in a separate interview with CNBC, Clayton underscored the differences between the charges against Binance and Coinbase. The former, he explained, is more related to allegations of fraud and evasion, while the Coinbase situation revolves around the ongoing debate of what constitutes a security and what doesn’t.

He further remarked on the need for cryptocurrency platforms to comply with existing securities laws, suggesting that the financial world is unlikely to “bend” to the innovation brought by cryptocurrencies.

Drawing parallels between the crypto industry and the gig economy, he described the former’s playbook as one that assumes innovation would overcome regulatory resistance, a notion he challenged. He posited that the perceived value of cryptocurrency companies might have been inflated under the impression that they were leading a financial revolution — a sentiment he finds might be dwindling.