RippleIn a recent development that’s been turning heads in the financial and legal communities, Ripple’s Chief Legal Officer, Stuart Alderoty, has leveled serious criticism against the U.S. Securities and Exchange Commission (SEC). Alderoty’s remarks come amid ongoing legal challenges involving Ripple, a leading player in the cryptocurrency space.
Alderoty, in a series of public statements, has accused the SEC of engaging in questionable practices, allegations that are gaining traction with federal judges. He asserts that these practices have led to notable court defeats for the agency. His comments point to a growing sentiment of judicial skepticism towards the SEC’s methods, particularly under the leadership of Gary Gensler.
Moreover, Alderoty has brought attention to what he describes as the SEC’s suppression of information about meetings with a convicted individual. This claim adds to the controversy surrounding the agency’s transparency and decision-making processes. Additionally, Alderoty referenced criticism from the government’s internal auditor, highlighting concerns about the SEC’s practices.
This isn’t the first time Ripple’s CLO has taken a stand against the SEC. The agency previously charged Ripple in December 2020, alleging violations of federal securities laws in connection with XRP sales. However, the court, led by Judge Analisa Torres, largely disagreed with the SEC’s view, finding that the majority of Ripple’s transactions were lawful.
Furthermore, the SEC’s challenges extend beyond Ripple. They recently faced a significant setback in their dispute with Grayscale Investments over a proposed spot Bitcoin ETF. The court ruled against the SEC, labeling its regulatory approach arbitrary and capricious.
Alderoty also highlighted the SEC’s recent loss in the Second Circuit Court of Appeals case against Aaron Govil. Legal experts, including John Deaton and Jeremy Hogan, speculate that this decision could influence the remedies phase of the SEC v. Ripple lawsuit. The court’s ruling emphasized that compensation should be limited to parties who suffered actual financial losses.
Ripple faces a potential fine as the Ripple lawsuit moves into its remedies phase, with a discovery deadline set for February 12, 2024. The SEC will likely seek a penalty of around $770 million, correlating with Ripple’s revenue from XRP sales to institutional clients. However, adjustments may reduce this figure, considering non-U.S. sales and legitimate business expenses.
Ripple’s ongoing legal saga with the SEC continues to unravel, with recent developments shedding light on broader concerns about the SEC’s practices. As the case progresses, the financial and legal sectors will be watching closely to see how these disputes shape the future of cryptocurrency regulation and enforcement.
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