Ripple’s General Counsel, Stu Alderoty, has criticized the United States Securities and Exchange Commission (SEC) for attempting to “bully, bulldoze and bankrupt” crypto innovation in the United States on behalf of the expansion of its own regulatory territory.
“By taking enforcement action – or threatening potential enforcement – the SEC intends to intimidate, bulldoze and bankrupt crypto innovation in the United States, all in the name of the impermissible extension of its own jurisdictional limits.”
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 US” by dealing each cryptocurrency as a security.
“Like a hammer wanting everything to be a nail, the SEC keeps everything in the dark so it can say every crypto is a security.”
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 Ripple (XRP) tokens to raise funds for the company to from 2013, claiming it was an unrecorded title. at the time.
Ripple fired back, claiming that a 2018 speech by Robert Hinman, then director of corporate finance for the SEC, classified Ether (ETH) and Bitcoin (BTC) and by association, XRP, as unsafe due to to be “sufficiently decentralized”.
Ripple argued that the speech contradicted the SEC’s assertions against Ripple and the XRP token, but the SEC countered the argument by claiming that the speech was the director’s personal opinion and not the official opinion of the director. regulator. This nuance was one of the most crucial aspects of Ripple’s lawsuit against SEC.
4 years since Hinman’s (very) famous speech, and we’re a long way from knowing how to classify digital assets in the US – keeping every crypto, including ETH, in regulatory limbo. I wrote some thoughts for @Fortune why is that enough @SECGov. https://t.co/FB16cceaia
— Stuart Alderoty (@s_alderoty) June 13, 2022
“Despite warnings that the speech was Hinman’s personal opinion and ‘not necessarily that of the Commission,’ the market took Hinman’s speech to heart,” Alderoty wrote.
“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.
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Alderoty said the speech embodied the SEC’s deliberate muddling of crypto regulatory waters.
“Here in the United States, the Securities and Exchange Commission (SEC) has deliberately muddied the regulatory waters of crypto […] To unlock the true potential of crypto, we must finally clean up this regulatory mud.
At a Washington Post event on June 8, U.S. Senators Kirsten Gillibrand agreed that most cryptocurrencies would likely be classified as securities under the Howey test, with the obvious exceptions of Bitcoin and Ether.
Rostin Behnam, chairman of the Commodity Futures Trading Commission (CTFC) took a slightly different view, saying that while there are “probably hundreds” of coins that replicate security coins, there are also many coins. , such as BTC and ETH which would be regulated by its commission.
The legal battle between Ripple and the SEC is expected to set a precedent for the treatment of cryptocurrencies, especially altcoins under US securities and commodities laws.