The ongoing dispute between Ripple and the SEC has taken a new direction. Stuart Alderoty, Ripple’s Chief Legal Officer, recently spoke out against SEC officials, especially Gary Gensler, referencing a contentious proposal from three years ago.
What did Alderoty have to say? And what can this mean for the market? Read on!
Ripple’s Stand: No Settlement with the SEC
Alderoty shared that before filing a lawsuit against Ripple, the SEC had suggested a settlement. This would have required Ripple to recognize XRP as a security and adjust to current securities regulations within a short timeframe. However, Ripple declined, firmly believing that XRP wasn’t a security and pointing to unclear rules about cryptocurrencies.
After a three-year legal battle, Ripple had some positive outcomes this year. A key decision on July 13 confirmed that XRP isn’t a security. Alderoty stressed that this clarity on XRP’s status was their main goal all along.
Read More: XRP Lawsuit Update: Will the SEC Pay Any Reimbursement for Losing Against Ripple?
Ripple Stands Strong
After three years of rigorous fight with the SEC, Ripple received some favorable court rulings earlier this year, notably a summary judgment on July 13 affirming that XRP isn’t a security. Alderoty emphasized that proving XRP’s non-security status was always the primary objective.
Additionally, Alderoty underscored Ripple’s resilience in fighting the lawsuit, stating that despite skepticism, the company emerged victorious. He also pointed out how the SEC’s inconsistent arguments were exposed during the legal proceedings, notably highlighted by Magistrate Sarah Netburn’s critique of the SEC’s opportunistic stance to serve its goals rather than faithfully uphold the law.
And the Battle Continues…
The final judgment is pending as the case moves into the remedies phase to determine Ripple’s penalty for alleged law violations. Following this, the SEC will decide whether to challenge the judgment at the Second Circuit or consider a settlement with Ripple, which remains uncertain. While Ripple’s case is unique and was a well-played legal battle, others may struggle to overcome the regulatory hurdles.
Since the SEC is in not well placed to bring new rules, they believe Howey and will rely on the Supreme Court’s decision to tackle the security complexities. On a clear note, the SEC said that if a crypto asset is offered and sold as a security, it must undergo the disclosure process established by Congress.
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