In recent events, Ripple’s Chief Legal Officer, Stuart Alderoty, has fact-checked the U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler, asserting that Ripple was never charged with dishonesty. This follows Gensler’s keynote address last month, where he quoted past SEC chair Joseph P. Kennedy, emphasizing the SEC’s role as prosecutors of dishonesty in business.
Contrary to Gensler’s claims, Alderoty took to Twitter to highlight the SEC’s departure from Kennedy’s stance in the Ripple lawsuit. Despite the SEC’s legal action against Ripple in December 2020, Alderoty argued that the commission did not charge the blockchain company with dishonesty.
According to Alderoty, the prejudgment of the Ripple case began with former SEC director William Hinman, not aligning with Kennedy’s principles.
Ripple’s Legal Victory and SEC’s Approach
In a significant legal development, a federal court ruled against the SEC’s claims, declaring that XRP, the digital asset associated with Ripple, is not a security. Judge Analisa Torres stated that Ripple did not violate securities laws in its programmatic sales of XRP, but the SEC secured a win regarding Ripple’s past and direct sales of XRP to institutional clients.
Alderoty went beyond the Ripple case, accusing Gensler of prejudging the cryptocurrency industry. Without a thorough investigation, the Ripple CLO contended that Gensler initiated multiple lawsuits against crypto companies, including LBRY, Coinbase, and Binance.
Related article: Ripple (XRP) signals a potential price surge: Is Cardano next?
Despite the SEC’s success in the LBRY case, legal battles against Binance and Coinbase are currently ongoing. Notably, the SEC has labeled various crypto assets as securities in these lawsuits, diverging from Gensler’s assertion that only Bitcoin lies outside the SEC’s regulatory purview. This shift in the regulatory landscape underscores the evolving nature of cryptocurrency oversight and raises questions about the broader implications for the industry.
Ongoing Regulatory Challenges for Binance and Coinbase
In the SEC’s lawsuits against Binance and Coinbase, the regulatory body categorized several cryptocurrencies as securities, notably including BNB, BUSD, ADA, and COTI. Despite Gensler’s consistent assertion that Bitcoin is the only cryptocurrency outside the SEC’s regulatory scope, these recent classifications highlight a departure from his stance.
As the legal landscape in the cryptocurrency industry continues to evolve, these developments raise questions about the SEC’s approach to enforcement actions and its adherence to the principles set forth by past SEC chairs.