IOHK CEO Charles Hoskinson says that the U.S. Securities and Exchange Commission’s (SEC) impending lawsuit against Ripple could have ramifications for the entire crypto industry.
In a new YouTube video posted on his channel, Hoskinson explains his thinking.
“The reason why this is a big deal for the industry as a whole is that it may have a profound implication on how the SEC in the future views whether something is a security or not…
It further pushes the burden of due diligence on exchanges. So I imagine this could create more conservatism with exchanges for listing new tokens. Or force them to evaluate their existing portfolios more carefully. So by no means is this a small event. This is probably the biggest regulatory event in the history of our industry. It’s going to have a lot of impact moving forward.”
The IOHK CEO also questions the timing of the lawsuit.
“It’s a very unorthodox thing as well because, generally speaking, an outgoing chairman of the SEC [Jay Clayton] wouldn’t leave a giant pile of fire for the incoming chairman to deal with. That usually doesn’t happen.
This is equivalent to a CEO making a decision to do a major merger and acquisition or an IPO or a big unfinished piece of business without the consent or knowledge of his successor. And then having the successor have to manage the entire affair.”
Clayton leaves the agency at the end of the year, a move he announced last month. Hoskinson says he believes the decision on whether or not to sue Ripple should be Clayton’s successor’s to make.
“Frankly it’s the kind of thing that, as a courtesy, you would defer to the next administration to look at. Because any lawsuit of this scale and magnitude would probably take greater than a year to litigate, regardless of where it ends up because of the size of the entities involved.”
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