Stuart Alderoty, the general counsel for Ripple, asserted that neither the SEC had designated XRP as a security nor does it possess the authority to do so. “One judge phrased it this way: the SEC can only ask the question, and the court eventually answers,” he continued, elaborating on his meaning.
#XRPCommunity #XRP @s_alderoty The SEC has not labeled XRP a security and does not even have the power to do so. 👇👇 https://t.co/1lUJs693Tr
— James K. Filan 🇺🇸🇮🇪 126k (beware of imposters) (@FilanLaw) November 21, 2022
Ripple GC: SEC Has Not Labeled XRP Security
In the wake of the FTX collapse, the Ripple general counsel responded to a New York Times article on SEC Chair Gary Gensler. Alderoty addressed a claim in the report that XRP’s standing has fallen after the SEC classified it as a security.
Alderoty’s post was commented on by John Deaton, the founder of CryptoLaw, who stated that XRP could only be classified as a security by a court.
“Let me add that the SEC itself acknowledged that it does not determine whether an asset is a security — only the Court,” he wrote.
Gary Gensler has remained at the forefront of discussions over cryptocurrency regulation since FTX’s demise. During his 19 months as SEC chairman, Gensler punished several cryptocurrency companies for securities violations, with some fines topping $100 million. Gensler’s assertions that most cryptocurrencies were securities are supported by the Howey Test, a legal study that the Supreme Court established in 1946.
The cryptocurrency industry has said that the SEC is seeking to squeeze digital currencies into an outdated framework. According to the NYT article, the success of Gensler’s plan may ultimately depend on the outcome of the Ripple litigation, which the SEC filed in December 2020.
Congress, where numerous laws relating to cryptocurrencies were introduced this year, will also pay attention to the conclusion. The increased scrutiny has resulted from FTX’s collapse. Screenshots of Gensler’s public meeting schedule, which show numerous meetings with Sam Bankman-Fried, have been circulating on Twitter and have placed him in the spotlight of the current discussion.
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