05 January 2023 08:59, UTC
Reading time: ~3 m
Alderoty calls out the SEC for “hubris.”
In a tweet yesterday, Ripple general counsel Stuart Alderoty responded to claims that the US Securities and Exchange Commission sued Ripple for defying its authority.
According to the lawyer, if accurate, it makes the SEC’s actions even more worrying. Alderoty asserts that it would mean the regulator is acting out of wounded pride instead of allegiance to the law.
“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.”
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. We have crossed from regulation by enforcement to hubris most foul. https://t.co/eT5tStXM6E
— Stuart Alderoty (@s_alderoty) January 4, 2023
Notably, the lawyer said this in response to FOX Business’ Charles Gasparino, who claimed that in the course of his reporting, he believes the SEC sued Ripple for “flouting” its authority. According to Gasparino, Ripple continued to sell XRP despite receiving a cease-and-desist notice from the regulator. The senior correspondent bolstered his claim by asserting that the Ethereum Foundation possibly made only one sale and did not receive a lawsuit.
Meanwhile, Alderoty was not alone in his criticism of the SEC’s actions in light of Gasparino’s claims. Attorney John Deaton, who represents XRP holders as a friend of the court in the legal battle, noted that the claim of Ripple flouting the SEC’s authority did not justify the unnecessarily broad claims that hurt the very consumers the regulator is sworn to protect.
What can’t get lost here is the mission of the SEC is to protect investors – XRPHolders who had nothing to do w/Ripple allegedly “flaunting the SEC’s authority.” SEC officials intentionally asserted over-broad allegations to cause maximum pain on the people they protect. Shameful
— John E Deaton (@JohnEDeaton1) January 4, 2023
Recall that in December 2020, the SEC, in a complaint, accused Ripple and its executives of engaging in the offer and sale of an unregistered security, XRP. Notably, it kicked off a lengthy legal battle that has endured to date.
Deaton has argued that the SEC’s claims are unprecedented in securities law in a petition for a writ of mandamus filed in January 2021 and in a recent request to join the SEC vs. LBRY case as a friend of the court on behalf of Naomi Brockwell. According to the attorney, it goes against previous guidance as the underlying asset packaged as a security by an investment contract has never been termed a security. That is to say, even if Ripple did offer and sell a security, XRP alone could not be termed a security.
However, the SEC has yet to clarify this, a condition upon which Ripple is willing to settle per statements from Ripple chief Brad Garlinghouse.
Pundits believe the end is in sight for the prolonged legal battle. Attorney James K. Filan, who follows the case closely, has predicted that the judge will give her ruling on or before March 31.
Recall that yesterday was the deadline for third parties to request to seal and redact materials related to summary judgment motions. On January 9, the SEC and Ripple will file responses to the omnibus motions filed on December 22.
Read the full article here