Ripple’s chief legal officer says the U.S. Securities and Exchange Commission (SEC) is “anything but infallible,” emphasizing that the regulator is “bloated, broken, and beleaguered.” He advised investors not to be intimidated when having to deal with the securities watchdog.
‘SEC Is Anything But Infallible’
Ripple’s chief legal officer, Stuart Alderoty, slammed the U.S. Securities and Exchange Commission (SEC) on social media platform X on Thursday.
Quoting an article published in the Wall Street Journal stating that the Supreme Court has repeatedly ruled against the SEC in recent years, Alderoty stressed that the securities regulator is “anything but infallible,” noting that the agency is “bloated, broken, and beleaguered.” He also advised investors: “Don’t be intimidated when they come knocking.”
Commenting on Alderoty’s statement, lawyer John Deaton shared: “I remember when I sued the SEC and some people said: ‘You’re crazy.’ Why? The SEC is only good at one thing: intimidating people because they have the unlimited resources of the American taxpayer. And some people also get intimidated because maybe fighting the SEC will mean the SEC calls the IRS [Internal Revenue Service] on you as well. This country was born fighting against government oppression and intrusion. It is most American to fight back!”
The securities regulator recently lost several legal cases against crypto firms. Last month, Alderoty highlighted three consecutive wins for Ripple Labs against the SEC, including the July 13 decision ruling that as a matter of law XRP is not a security, the Oct 3 decision denying the SEC’s bid for an interlocutory appeal, and the SEC dropping its lawsuit against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen.
The SEC also lost against Grayscale Investments in a lawsuit regarding the conversion of Grayscale’s bitcoin trust (GBTC) into a spot bitcoin exchange-traded fund (ETF). In August, the U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale, stating: “The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products. We therefore grant Grayscale’s petition and vacate the order.” The court subsequently ordered the SEC to reevaluate Grayscale’s bitcoin ETF conversion application.
Many people have criticized SEC Chairman Gary Gensler for taking an enforcement-centric approach to regulating the crypto industry. Gensler has repeatedly stated that crypto is a field rife with hucksters, fraudsters, and non-compliant parties. This month, the securities regulator sued Kraken for the second time this year after the crypto exchange paid $30 million to settle a lawsuit with the regulator in February. There is currently a bill in Congress seeking to remove Gensler as the chair of the SEC.
Do you agree with Ripple’s chief legal officer about the SEC? Let us know in the comments section below.
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