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HomeCrypto NewsRipple's Counsel Responds To SEC Claim That The Company Defied Its Authority

Ripple’s Counsel Responds To SEC Claim That The Company Defied Its Authority

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Stuart Alderoty, the general counsel for Ripple, responded to rumors that the US Securities and Exchange Commission had filed a lawsuit against the company for disobeying its authority in a tweet on Wednesday.

In the lawyer’s opinion, the SEC’s activities become even more disturbing if the assertion is true. According to Alderoty, this indicates that the regulator is not following the law but acting out of bruised pride.

“Even if true, this only shows that the SEC’s unelected bureaucrats believe they have unchecked power to issue indiscriminate closed-door edicts under pain of punishment to those who don’t blindly obey,” Alderoty wrote. “We have crossed from regulation by enforcement to hubris most foul.”

Read more: ‘Cautiously Optimistic’ Ripple CEO Anticipates Congress Clarity on Crypto in 2023

It is relevant to note that the attorney made this statement in reaction to Charles Gasparino of FOX Business, who alleged that he thought the SEC had sued Ripple for “flouting” its power during his reporting. Gasparino claims that despite the regulator’s cease-and-desist warning, Ripple kept selling XRP. The senior correspondent supported his assertion by claiming that it’s possible the Ethereum Foundation made just one sale and went unchallenged.

Regarding the SEC’s conduct in light of Gasparino’s allegations, Alderoty was not the only one to voice his disapproval. In the legal dispute, attorney John Deaton, who represents XRP holders as a friend of the court, referred to the allegation that Ripple had violated the SEC’s power and did not warrant the overly general accusations that harm the same customers the regulator is pledged to safeguard.

Read also: Why Is The XRP Price So Low? Explained by Ripple’s CTO

Remember how the SEC charged Ripple and its officials with offering and selling XRP, an unregistered security, in a complaint filed in December 2020. Notably, it began a protracted legal conflict that has continued to this day.

In a petition for a writ of mandamus submitted in January 2021 and a more recent request to join the SEC v. LBRY lawsuit as a friend of the court on behalf of Naomi Brockwell, Deaton contended that the SEC’s assertions are unusual in securities law. The attorney claims that because the underlying asset packaged as a security by an investment contract has never been referred to as a security, it goes against earlier guidelines. In other words, even if Ripple did provide and sell a security, XRP by itself could not be referred to as a security.

Ripple CEO Brad Garlinghouse stated that Ripple is willing to settle; however, the SEC still needs to address this.

Experts predict that the protracted legal conflict will soon come to an end. James K. Filan, an attorney who constantly monitors the case, has projected that the judge will issue her decision on or around March 31.

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