Stuart Alderoty, Ripple’s Chief Legal Officer, recently unveiled a significant development in the prolonged legal tussle between Ripple and the U.S. Securities and Exchange Commission (SEC). Three years after the SEC initiated a lawsuit against Ripple, co-founder Christian Larsen and CEO Bradley Garlinghouse, Alderoty shed light on the SEC’s initial settlement offer.
Alderoty disclosed that the SEC proposed a settlement before officially filing the lawsuit in Dec 2020. The terms included Ripple publicly designating XRP as a security, allowing a brief market window for alignment with compliance requirements. This pre-lawsuit offer underscored the SEC’s stance on XRP’s security status.
On Dec 22, they accused Ripple of conducting an unauthorized digital asset securities offering. Allegedly, the company and its executives raised more than 1.3 billion dollars. The SEC emphasized enforcement over formulating a clear regulatory structure for cryptocurrency.
In addition, one year later, in July 2014, judge Atalis Torres ruled that XRP is not a security for retail lies. The ruling is a big setback for the SEC’s arguments. In this way, the court’s ruling represents a recasting of how to conduct the conversation among regulators and legal actors about digital assets. Afterward, regulators will likely treat XRP as possessing potential rights similar to those in other tokens.
SEC’s Ripple Clash: Crypto Regulation Challenges
The enforcement-led litigation strategy of the SEC also reached into major crypto exchanges such as Coinbase and Binance. Critics poked fun at this approach, calling it a ‘jack in the box.’ Many U.S.-based digital currency companies view this approach as a threat to growth in the domestic market, and some are even weighing taking their operations elsewhere offshore. Proof of What–Alderoty’s recent disclosure that the U.S. SEC told FTX’s initial settlement offer was U.S. $ 50 million adds to how Mascheroni sees it: we should not easily irritate.
Secondly, the current legal battle in which Ripple is fighting back against policies by the SEC has also become a driving topic of debate about how to regulate cryptocurrency within American territory. The complex, dynamic nature of digital asset regulation is highlighted by the taboo crushing that took place early in this case. Ripple did not accept the SEC’s initial settlement offer, and they won their lawsuit against the regulator. Cases such as this demonstrate the urgency of clear and detailed rules built around the media.
In addition, in its efforts to date, The SEC has not yet developed well-rounded regulatory rules for the subtleties of cryptocurrency. This regulatory gap has left the legal standing of digital assets uncertain for businesses and investors alike. The Ripple case is set to change how digital assets are classified and regulated in America. Its outcomes can influence the future of cryptocurrency both at home and abroad.
Related Reading | Three Arrows Capital: $1B Asset Freeze in Crypto Fund Collapse
The author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.
