Ripple Lawyer Slams SEC for Trying to Disrupt Cryptocurrency Innovation

Ripple general counsel Stu Alderoty has slammed the U.S. Securities and Exchange Commission (SEC) for trying to "bully, destroy and disrupt" cryptocurrency innovation in the U.S. in the name of expanding its regulatory domain.

“By taking enforcement action — or the possible threat of enforcement — the SEC intends to bully, tear down, and disrupt crypto innovation in the United States in the name of an impermissible expansion of its jurisdiction.”

Alderoty shared his perspective on the ongoing lawsuit between Ripple and regulators on June 13, which he said is part of “the SEC’s attack on all cryptocurrencies in the United States.” Think of every cryptocurrency as a security.

“Just like a hammer wants everything to be a nail, the SEC obscures everything so it can argue that every cryptocurrency 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 accusing Ripple executives of using the Ripple (XRP) token to raise funds for the company beginning in 2013, saying it was a Unregistered Securities.

Ripple hit back, claiming that a 2018 speech by then-SEC corporate treasurer Robert Hinman classified Ethereum (ETH) and Bitcoin (BTC), and related XRP, as non-securities because “sufficient centralization".

Ripple argued that the speech contradicted the SEC’s assertion regarding Ripple and the XRP token, but the SEC refuted this argument, claiming that the speech was the director’s own personal opinion and not the regulator’s official view. This nuance has been one of the most critical aspects of Ripple’s lawsuit with the SEC.

"Despite the statement that the speech was Hinman's personal opinion and "not necessarily the committee's view," markets took Hinman's speech to heart," Alderoty wrote.

“For Ripple, Hinman’s presentation affirmed the conclusion that XRP — a cryptocurrency that exists on an open, permissionless, decentralized blockchain ledger — is a commodity and/or virtual currency. Certainly not securities," he added.

Alderoty said the speech was the epitome of the SEC’s deliberate effort to disrupt the cryptocurrency regulatory landscape.

“In the US, the Securities and Exchange Commission (SEC) has deliberately muddied the regulatory landscape for cryptocurrencies [...] In order to unlock the true potential of cryptocurrencies, we need to finally clean up this regulatory sludge.”

At a Washington Post event on June 8, U.S. Senator Kirsten Gillibrand agreed that most cryptocurrencies are likely to be classified as securities under the Howey test, with bitcoin and ethereum being the notable exceptions.

Rostin Behnam, chairman of the Commodity Futures Trading Commission (CTFC), took a slightly different view, saying that while there are "probably hundreds" of tokens that could replicate security tokens, there are also many commodity tokens, such as BTC and ETH, that should be traded by him. committee supervision.

The court battle between Ripple and the SEC is expected to set a precedent for the treatment of cryptocurrencies, especially altcoins under U.S. securities and commodities laws.