Stuart Alderoty Exposes Hypocrisy as SEC’s Offer to Settle with Ripple is Revealed
Ripple and the SEC are currently locked in a legal battle over whether XRP should be classified as a security. Ripple argues that it is not, while the SEC insists that it should be registered as one.
Despite the ongoing dispute, Ripple has recently achieved some legal victories, including a court ruling that determined XRP is not a security. While the final judgment is still pending, Ripple remains confident that they will ultimately succeed in their case.
The conflict between Ripple and the SEC has taken a new turn as Stuart Alderoty, Ripple’s Chief Legal Officer, publicly criticized SEC officials, particularly Gary Gensler, referring to a controversial proposal from three years ago.
Alderoty revealed that prior to filing a lawsuit against Ripple, the SEC had proposed a settlement. Under this settlement, Ripple would have been required to acknowledge XRP as a security and adhere to existing securities regulations within a short period of time. However, Ripple declined the offer, firmly asserting their belief that XRP is not a security and pointing to the lack of clear regulations surrounding cryptocurrencies.
After a three-year legal battle, Ripple experienced some positive outcomes this year. A significant decision made on July 13 confirmed that XRP is not a security. Alderoty emphasized that achieving clarity on XRP’s status was always their main objective.
In addition, Alderoty highlighted Ripple’s resilience in fighting the lawsuit, stating that despite doubts, the company emerged victorious. He also pointed out the SEC’s inconsistent arguments, which were exposed during the legal proceedings and highlighted by Magistrate Sarah Netburn’s criticism of the SEC’s opportunistic approach in serving its own interests rather than upholding the law faithfully.
However, the final judgment is still pending as the case enters the remedies phase to determine the penalties Ripple may face for alleged violations. After this phase, the SEC will decide whether to challenge the judgment at the Second Circuit or consider a settlement with Ripple, although the outcome remains uncertain. While Ripple’s case has been unique and well-fought, other companies may struggle to overcome regulatory obstacles.
As the SEC faces challenges in establishing new rules, they are expected to rely on the Supreme Court’s decision on the Howey Test to address the complexities of securities regulation. The SEC has made it clear that if a cryptocurrency asset is offered and sold as a security, it must undergo the disclosure process mandated by Congress.
The ongoing dispute between Ripple and the SEC has attracted significant attention and is closely watched by the cryptocurrency market. The outcome of this case could have far-reaching implications for the industry.