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Ripple counsel says SEC is bankrupting crypto innovation

Ripple Price XRP-USD
Ripple Price XRP-USD

The Ripple general counsel, Stu Alderoty, has spoken out against the US Securities and Exchange Commission (SEC). The executive said that the SEC was acting against the cryptocurrency market with the false claims that it was enhancing regulations.

Ripple attacks SEC over crypto regulations

Alderoty shared his opinion about the cryptocurrency market on Monday, discussing the ongoing lawsuit between the company and the SEC. He said that the lawsuit was an attempt by the SEC to thwart the efforts made by the cryptocurrency sector.

“By bringing enforcement actions-or threats of potential enforcement-the SEC intends to bully, bulldoze, and bankrupt crypto innovation in the US, all in the name of impermissibly expanding its own jurisdictional limits,” the announcement said.

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The executive also said that the SEC was arguing that every cryptocurrency was a security, which was interfering with the success of the cryptocurrency industry. Ripple Labs was sued by the SEC in December 2020, and the lawsuit has been ongoing since then.

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The lawsuit alleges that Ripple’s executives were involved in an unregistered securities sale. According to the lawsuit, XRP, the native token for the Ripple network, is a security, and Ripple had raised funds through an unregistered securities offering.

Ripple argues XRP is a security

Amid this lawsuit, Ripple and its executives have argued that XRP is a security. The company’s legal team has referred to past statements by SEC Commissioners such as William Hinman that say that XRP is a commodity or a virtual currency.

Alderoty has also said that the SEC actions have soiled the crypto regulatory framework. “Here in the US, the Securities and Exchange Commission (SEC) has deliberately muddied the regulatory waters for crypto […] To unlock crypto’s true potential, we need to finally clean up this regulatory sludge.”

US Senators Kirsten Gillibrand and Cynthia Lummis recently tabled a bill on crypto regulations in the US. Some provisions on the bill said that most cryptocurrencies would be classified as securities because they passed the Howey test. The senators argued that only Bitcoin and Ether could be classified as commodities.

The chair of the Commodity Futures Trading Commission, Rostin Chair, has also previously argued that while many cryptocurrencies could be ranked as securities, some could be classified as commodities, including Bitcoin and Ether. The court case between Ripple and the SEC could set a precedent for how crypto is regulated in the US.

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