Ripple general counsel Stu Alderoty has slammed the United States Securities and Exchange Commission (SEC) for trying to “bully, bulldoze, and bankrupt” crypto innovation in the U.S. in the name of developing a regulatory territory.
“By taking enforcement actions — or threats of potential enforcement — the SEC is going to disrupt, bulldoze, and bankrupt crypto innovation in the U.S., all in the name of impermissibly expanding the boundaries of its own jurisdiction.”
Alderoty shows her views on June 13 amid ongoing lawsuits between Ripple and regulators, which he said were part of an “SEC attack on all crypto in the U.S.” by treating every cryptocurrency as a security.
“Just as a hammer wants everything to be a nail, the SEC keeps everything grim so it can dismiss every crypto as security.”
Ripple Labs has been engaged in a legal battle with the SEC since December 2020, when securities regulators filed a lawsuit alleging that Ripple executives had used Ripple (XRP) tokens to raise funds for the company since 2013, claiming to be an unregistered security at the time.
Ripple fights back, claiming that 2018 speech posted by Robert Hinman, director of Corporation Finance for the SEC, has classified Ether (ETH) and Bitcoin (BTC) and an association, XRP, are non-security because they are “sufficiently decentralized”.
Ripple denied that the speech contradicted the SEC’s claims against Ripple and the XRP token, but the SEC refute that argument by claiming that the speech is the personal view of the director himself and not the official view of the regulator. This nuance is one of the most important aspects of the Ripple vs. SEC lawsuit.
4 years since Hinman’s famous (at) speech, and we don’t know how to classify digital assets in the U.S. – keeping every crypto, including ETH, in regulatory limbo. I wrote some thoughts for you @Rejeki why is enough, @SECGov. https://t.co/FB16cceaia
– Stuart Alderoty (@s_alderoty) June 13, 2022
“Despite disclaimers that the speech was Hinman’s personal opinion and“ should not be a Commission, ”the market took Hinman’s speech to heart,” Alderoty wrote.
“For Ripple, Hinman’s speech underscored the conclusion that XRP – a cryptocurrency that is in an open, unauthorized, decentralized blockchain ledger – is a commodity and / or virtual currency. It is certainly not a security,” he said.
Alderoty said the speech reflected the SEC’s deliberate muddying over regulatory waters for crypto.
“Here in the U.S., the Securities and Exchange Commission (SEC) is deliberately undermining regulatory waters for crypto. […] To unlock the true potential of crypto, we finally need to clean up the sludge of this regulation.
During a Washington Post event on June 8, U.S. Senator Kirsten Gillibrand agreed that cryptocurrencies would generally be probabilities are classified as securities according to the Howey Test, except Bitcoin and Ether are obvious.
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 mimic security coins, there are also many commodity coins, such as BTC and ETH that will be. regulated by his commission.
The court battle between Ripple and the SEC is expected to set a precedent for the treatment of cryptocurrencies, particularly altcoin under U.S. securities and commodities laws.