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Stuart Alderoty questions SEC’s approach in Ripple’s legal saga

Stuart Alderoty

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TL;DR

  • Ripple’s Chief Legal Officer, Stuart Alderoty, challenges the SEC’s handling of the Ripple case, suggesting it deviates from the commission’s founding principles.
  • Despite the SEC’s lawsuit alleging illegal fundraising through XRP sales, Ripple has not been accused of fraud, aligning with Judge Torres’s ruling that XRP is not a security.
  • Alderoty points out the SEC’s rapid and broad application of regulations to cryptocurrencies, impacting firms like LBRY, Coinbase, and Binance.

Ripple‘s Chief Legal Officer, Stuart Alderoty, has recently raised critical points against the Securities and Exchange Commission (SEC), led by Gary Gensler. Alderoty’s remarks follow Gensler’s keynote speech at the 2023 Securities Enforcement Forum, where he discussed the commission’s achievements and referenced historical statements by former SEC chairs. However, Alderoty contends that the SEC’s actions, particularly in the Ripple case, deviate from its founding principles.

Moreover, Alderoty highlights a significant discrepancy. Despite the SEC’s lawsuit against Ripple for alleged illegal raising of $1.3 billion through XRP sales, the commission did not accuse Ripple of fraud. This observation aligns with the recent ruling by Judge Analisa Torres, which found that XRP itself is not a security and that Ripple’s automated XRP sales and other distributions did not violate laws.

Alderoty Critiques SEC’s Cryptocurrency Regulation Approach

The legal battle between the SEC and Ripple has been unfolding since December 2020. Judge Torres’s decision dealt a notable setback to the SEC, invalidating several of its accusations against Ripple. However, the court did side with the SEC regarding Ripple’s direct sales of XRP to institutional customers in the past. Consequently, the case has become a focal point in the ongoing debate over cryptocurrency regulation.

Additionally, Alderoty argues that under Gensler’s leadership, the SEC has hastily approached cryptocurrency regulation, leading to cases against several firms, including LBRY, Coinbase, and Binance. These actions further emphasize the complex landscape of digital asset regulation and the SEC’s evolving stance.

Alderoty Calls for Balanced Crypto Regulation

The SEC’s classification of various cryptocurrencies as securities in its cases against Binance and Coinbase has sparked widespread discussion. Gensler maintains that Bitcoin is the only digital asset outside the SEC’s regulatory scope. This stance has significant implications for the broader cryptocurrency market and its stakeholders.

Furthermore, the SEC’s victory in its action against LBRY, coupled with ongoing litigation against Binance and Coinbase, underscores the commission’s assertive regulatory posture. However, Alderoty’s critique suggests a need for a more nuanced approach that aligns with the foundational principles of the SEC and accommodates the unique characteristics of digital assets.

The Ripple case, alongside the SEC’s broader enforcement strategy under Chair Gary Gensler, remains a critical area of focus in the evolving landscape of cryptocurrency regulation. As the legal battles continue, the outcomes of these cases will likely shape the future of digital asset oversight and the balance between innovation and regulation in this dynamic sector.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Mutuma Maxwell

Maxwell especially enjoys penning pieces about blockchain and cryptocurrency. He started his venture into blogging in 2020, later focusing on the world of cryptocurrencies. His life's work is to introduce the concept of decentralization to people worldwide.

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