Stuart Alderoty, Ripple’s general counsel, claims that the SEC desperately needs clear rules

Ripple general counsel Stu Alderoty has criticized the US Securities and Exchange Commission (SEC) for attempting to “bully, bulldoze, and bankrupt” crypto innovation in the United States to expand its management territory.


Stuart Alderoty, general counsel at blockchain company Ripple

Ripple counsel slams SEC for trying to bulldoze and bankrupt crypto

Alderoty shared his views on June 13 amid an ongoing lawsuit between Ripple and the regulator, which he says is part of the “SEC’s assault on all crypto in the U.S.” by treating every cryptocurrency as a security. “Like a hammer wanting everything to be a nail, the SEC is keeping everything murky so it can argue every crypto is a security,” claims Ripple general counsel Stu Alderoty. “By bringing enforcement actions–or threats of potential enforcement–the SEC intends to bully, bulldoze, and bankrupt crypto innovation in the U.S., all in the name of impermissibly expanding its own jurisdictional limits.”

Ripple Labs has been embroiled in a legal battle with the SEC since December 2020, when the securities regulator filed a lawsuit alleging that Ripple executives used the XRP. to raise funds for the company starting in 2013, claiming it is unregistered security. at that time.

Ripple hit back, claiming that a 2018 speech by Robert Hinman, then the SEC’s Chief Financial Officer of Corporations, classified Ether (ETH) and Bitcoin (BTC) and its link, XRP, as no security due to being “enough decentralization”.

Ripple argued that the speech contradicted the SEC’s claims against Ripple and the XRP token, but the SEC countered the argument by stating that the speech was the personal opinion of the director and not official position of the governing body. This nuance is one of the most important aspects of the case between Ripple and the SEC.

“Despite disclaimers that the speech was Hinman’s personal opinion and “not necessarily that of the Commission,” the market took Hinman’s speech to heart,” wrote Alderoty. “For Ripple, Hinman’s speech affirmed the conclusion that XRP – a cryptocurrency that exists on an open, permissionless, decentralized blockchain ledger – was a commodity and/or a virtual currency. Certainly not a security,” he added.

Alderoty said the speech was the epitome of the SEC’s intention to tamper with the regulatory waters for cryptocurrencies. “Here in the U.S., the Securities and Exchange Commission (SEC) has deliberately muddied the regulatory waters for crypto […] To unlock crypto’s true potential, we need to finally clean up this regulatory sludge.” During a Washington Post event on June 8, U.S. Senator Kirsten Gillibrand agreed that most cryptocurrencies would likely be classified as securities under the Howey Test, except Bitcoin and Ether.

Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CTFC), has a slightly different view, saying that while “there could be hundreds” of coins replicating security coins, there are also many everyday coins. commodities, such as BTC and ETH, are regulated by their commission.

The battle between Ripple and the SEC is expected to set a precedent for treating cryptocurrencies, especially altcoins, under US securities and commodity laws.

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