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 expanding its own regulatory territory.
“By bringing enforcement actions–or threats of potential enforcement–the SEC intends to bully, bulldoze, and bankrupt crypto innovation in the U.S., all in the name of impermissibly expanding its own jurisdictional limits.”
Alderoty shared his views on June 13 amidst an ongoing lawsuit between Ripple and the regulator, which he says is part of the “SEC’s assault on all crypto in the U.S.” by treating every cryptocurrency as a security.
“Like a hammer wanting everything to be a nail, the SEC is keeping everything murky so it can argue 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 had used Ripple (XRP) tokens to raise funds for the company starting in 2013, claiming it was an unregistered security at the time.
Ripple fought back, claiming that a 2018 speech delivered by Robert Hinman, then-Director of Corporation Finance for the SEC, had categorized Ether (ETH) and Bitcoin (BTC) and by-association, XRP, as a non-security due to being “sufficiently decentralized”.
Ripple argued that the speech was in contradiction with the SEC’s claims against Ripple and the XRP token, but the SEC countered the argument by claiming that the speech was the director’s own personal views and not the official view of the regulator. This nuance has been one of the most pivotal aspects of the Ripple vs SEC lawsuit.
4 years since the (in)famous Hinman speech, and we’re nowhere closer on knowing how to classify digital assets in the US – keeping every crypto, including ETH, in regulatory limbo. I penned some thoughts for @Fortune why enough 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 “not necessarily that of the Commission,” the market took Hinman’s speech to heart,” wrote Alderoty.
“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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