Ripple slams SEC for being hypocritical. Money transfer network Ripple’s lawyers reprimanded the SEC for actively trying to prevent the security agency’s employees from buying XRP, its native cryptocurrency. It is no secret that there is no love lost between Ripple and the SEC as they are already involved in a lawsuit and an investigation.
The US Securities and Exchange Commission (SEC) has always maintained that XRP, the cryptocurrency of Ripple, is unregistered and that the crypto is in violation of its rules. On June 13, Ripple general counsel Stu Alderoty accused the SEC of misusing its powers to further its own agenda. He said, “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.”
Amidst the ongoing lawsuit between the SEC and Ripple, Stu Alderoty shared his views on the SEC’s high-handed actions on crypto as the agency treats every cryptocurrency as a security. He also stated the SEC will bankrupt crypto if they continue to act like this.
Ripple Labs has been involved in a lawsuit with the SEC since 2020. In April 2022, Alderoty had taken to Twitter to express his gratitude to their loyal customers and mentioned his sorrow at the fact that the XRP lawsuit has inconvenienced “US citizens who were essentially the victims of a rug pull by the SEC”. At the time the lawsuit was filed, Ripple lost $15 billion in XRP market cap. Ripple slams SEC because, according to them, their progress has repeatedly been impeded by the SEC’s shortsightedness.
Alderoty also shared a post that called attention to how much damage Hinman’s 2018 speech at the Yahoo Markets Summit caused. He wrote, “4 years since the (in)famous Hinman speech, and we’re nowhere close to knowing how to classify digital assets in the US – keeping every crypto, including ETH, in regulatory limbo.” To highlight this, he also wrote a feature on Fortune. In his article he also called out Hinman’s newly created exception for ETH, as it presents a conflict of interest, which was discovered through a Freedom of Information Act (FOIA) request made by whistleblower group Empower Oversight.
In December 2020, the SEC filed a lawsuit against Ripple, its chairman, and CEO, alleging that XRP was a security. The lawsuit was filed by the regulator as executives had used Ripple cryptocurrency the XRP token to raise funds in 2013 and claimed that it was an unregistered security. Attorney of Ripple Stu Alderoty is of the opinion that this lawsuit is a continuation of the SEC’s war against crypto in the US. It also hints at a mission to bankrupt crypto.
He is especially incensed by the SEC’s lack of regulations and states that “like a hammer wanting everything to be a nail, the SEC is keeping everything murky so it can argue every crypto is a security.”
However, there is hope that the crypto landscape might soon change in the US. On June 8, Senators Kirsten Gillibrand and Cynthia Lummis asserted that they believe that most altcoins will likely be considered securities under their proposed new legislation, but they also confirmed that Bitcoin (BTC) and Ether (ETH) will be classified as commodities. Gillibrand also expressed her reluctance to accept the Commodity Futures Trading Commission (CFTC) as the primary regulator of cryptocurrencies. Rostin Behnam, chair of the CFTC believes that there are probably hundreds of altcoins which replicate security coins and will be regulated by his agency.
As Ripple slams SEC, crypto founders will keep a close eye on how the lawsuit plays out. The battle between Ripple and the SEC will decide the fate of altcoins in the US as cryptocurrencies struggle to find a foothold without proper regulation.
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