Ripple states SEC has ‘muddied the regulatory waters for crypto’

In December 2020 the SEC filed a lawsuit against Ripple, arguing that XRP was a security

The Ripple (XRP) logo on a smartphone                                 
Ripple’s general counsel Stuart Alderoty aired his views in a ‘Fortune’ article – Photo: Getty Images
                                

The United States (US) Securities and Exchange Commission (SEC) has been accused of “deliberately muddying the regulatory waters for crypto”.

This is what Stuart Alderoty, general counsel at Ripple, said in an article he wrote for Fortune.

Alderoty explained that in order to “unlock crypto’s true potential” of building “a more inclusive and open financial system,” the “regulatory sludge” of the SEC needs to be cleaned up.

In December 2020 the SEC filed a lawsuit against Ripple, arguing that XRP was a security.   

Former SEC chief’s 2018 comments

At a Yahoo Finance Summit in June 2018, former SEC chief William Hinman said in a speech that the Ethereum (ETH) network and the decentralised structure it works from “are not securities transactions”.

In July 2021, Ripple was granted permission to use Hinman’s comments in its case against the SEC by Judge Sarah Netburn.

The SEC fought hard to stop this happening, arguing that Hinman’s words did not represent guidance from the Commission itself.

Hinman explained back in 2018: “Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralised structure, current offers and sales of Ether are not securities transactions.”

“To bully, bulldoze and bankrupt crypto innovation”

The general counsel at Ripple said: “The SEC intends to bully, bulldoze and bankrupt crypto innovation in the US.”

Alderoty argues that as long as the US does not have a regulatory framework, it will “continue to fall further behind other responsible global economic centres”.

Four years on from Hinman’s speech, Alderoty notes that the US still “desperately” needs to clarify the “rules of the road that embrace innovation while protecting consumers and the integrity of markets”.

Further reading

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