Ripple legal chief officer Stuart Alderoty disclosed the settlement offer from the US Securities and Exchange Commission (SEC) prior to the lawsuit the agency filed against the blockchain-powered payment company.
On Dec. 22, 2020, the SEC accused Ripple’s co-founder, Christian Larsen, and CEO, Bradley Garlinghouse, of offering and selling XRP as an unregistered security. The regulator claimed the company raised more than $1.3 billion illegally.
Marking the completion of three years since the lawsuit was filed, Alderoty recalled the settlement terms proposed by the SEC before initiating the case. The settlement had required Ripple to recognize XRP as a security and adjust to current securities regulations within a short time frame, Alderoty explained. However, Ripple opposed the regulator’s request, asserting that XRP does not qualify as a security. Moreover, it argued that the regulator failed to establish a crypto-specific regulatory framework.
“Before the SEC sued Ripple, Chris and Brad (3 years ago today) they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to “come into compliance.”
The SEC’s assertion that XRP qualifies as a security was debunked in court. In the July 2023 Summary Judgment, Judge Analisa Torres ruled that XRP was indeed not a security when it comes to retail buying. In October, the SEC dropped charges levied against CEO Larsen and Garlinghouse.
Moreover, Alderoty noted that the company successfully exposed the SEC’s tyranny and hypocrisy during the lawsuit. Magistrate Sarah Netburn, one of the judges presiding over the case, highlighted the regulator’s hypocrisy and inconsistent arguments last year.
It’s uncertain whether Ripple’s lawsuit will end. The securities regulator has not presented any settlement offer publicly, prolonging the multi-year legal dispute.
Ripple CEO Slams SEC Chair
In a Dec. 22 post, Garlinghouse criticized SEC Chair Gary Gensler, accusing him of “stunning hypocrisy” in the crypto industry. Garlinghouse’s criticism comes in response to Gensler’s recent statements about widespread noncompliance in the crypto industry. He claimed Gensler had “cozied up to the biggest fraud in recent memory” and accused him of hurting customers while maintaining close ties with Wall Street.