Ripplo CLO Seeks Answers Amidst SEC Hack and False ETF News Causing Crypto Market Turmoil

Ripple’s Chief Legal Officer, Stuart Alderoty, has voiced his criticism of the SEC’s inconsistent rulings and arbitrary actions, echoing the concerns of the wider industry. The ongoing battle between Ripple and the SEC over the classification of XRP highlights the uncertainties surrounding the regulatory stance on cryptocurrencies. Ripple is now calling for complete transparency from the SEC following a recent cybersecurity breach and false announcement regarding the approval of a Bitcoin ETF.

Alderoty has provided insights into the dynamics that led to the approval of a spot Bitcoin ETF in the United States, emphasizing the role of setbacks faced by the SEC in various court cases. He characterizes the SEC as an “out of control regulator,” citing the Grayscale lawsuit as an example of the regulatory environment being influenced by legal challenges. In the Grayscale case, a judge criticized the SEC’s arbitrary actions, creating a climate where the approval of a Bitcoin ETF became more feasible.

The SEC’s approach has faced criticism not only from Alderoty but also from figures such as SEC Commissioner Hester Peirce. Peirce points out that the regulator’s actions are pushing retail investors towards less efficient ways of gaining exposure to Bitcoin. She also expresses concern that the SEC’s treatment of crypto-related applications is damaging its reputation and discouraging innovation in the sector.

This regulatory landscape is particularly relevant to Ripple, as the company has been dealing with legal challenges since the SEC filed a lawsuit in December 2020, alleging that the sale of XRP tokens constituted an illegal securities offering. The recent setback for the SEC in the XRP case, where a judge ruled that XRP sales to retail buyers were not securities, further emphasizes the challenges and uncertainties surrounding the SEC’s regulatory stance in the crypto space.

Alderoty not only challenges the SEC’s arbitrary actions but also calls for complete transparency from the regulatory body. He emphasizes the recent cybersecurity breach and false Bitcoin ETF approval announcement as reasons for the SEC to adhere to its own rules and disclose the incident’s nature, scope, and impact on the market. He also calls for a description of the SEC’s processes for assessing, identifying, and preventing such cybersecurity threats, highlighting the importance of regulatory transparency.

The incident has raised concerns not only about the security of sensitive information but also about the SEC’s decision-making authority in safeguarding investors. Despite some humorous reactions within the crypto community, the false announcement resulted in significant financial losses for individuals affected by it.