Ripple’s chief legal officer, Stuart Alderoty, has taken a bold stance against the United States Securities and Exchange Commission (SEC) and its chair, Gary Gensler. Alderoty, in a tweet, asserted that the SEC is not only losing legal battles but is also facing criticism from judges. According to Ripple’s general counsel, the latest blow to the SEC’s credibility is the recent loss in the Govil case, which he labeled as “no harm, no foul.”
The SEC is losing in court; being criticized by Judges for shady behavior; being rebuked by the Gov’t’s internal auditor; hiding info about meetings with a felon; becoming irrelevant on the international stage. Gensler – admitting no fault – has become the insulate Col. Jessep. pic.twitter.com/vqjPPcifr8
— Stuart Alderoty (@s_alderoty) November 16, 2023
The latest turn of events in the Govil case has the potential to exert a considerable influence on Ripple’s protracted legal skirmish with the SEC. Alderoty’s statements come on the heels of a string of noteworthy victories for Ripple in the cryptocurrency legal arena against the SEC.
In August, Grayscale, the asset manager, achieved a substantial legal victory, as a federal judge strongly criticized the SEC for its “arbitrary and capricious” conduct. The judge explicitly asserted that the SEC denied Grayscale’s bid to introduce a Bitcoin exchange-traded fund (ETF).
Ripple Execs Cleared of Charges
Ripple achieved a major triumph in July when a judge ruled that XRP, the cryptocurrency associated with the company, was not a security in and of itself. Following this decision, the SEC’s request for an interlocutory appeal was denied. The SEC subsequently dropped its charges against Ripple executives Brad Garlinghouse and Chris Larsen in October.
Meanwhile, in December 2020, the SEC made a suit against Ripple and its management for conducting an unregistered offering of digital assets securities amounting to more than $1.3 billion. In this context, the lawsuit charged Ripple for selling XRP as an unregistered securities offer to American and international investors beginning in 2013.
Furthermore, John Deaton, the founder of CryptoLaw, anticipates that Ripple could significantly reduce its fines. He points to the Supreme Court’s Morrison ruling, which excludes sales outside the United States from certain regulatory actions. The next phase in the Ripple case is set to be a remedies discovery process. Judge Torres has already established a schedule for proceedings.
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