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NEW YORK – Stuart Alderoty, general counsel of , took to Twitter (NYSE:) today to criticize the Securities and Exchange Commission (SEC) and its chairman, Gary Gensler. His comments follow a series of legal challenges the SEC has faced, including a recent court ruling in favor of Ripple and setbacks in other high-profile cases.
Mr. Alderoty’s criticism follows the ruling that XRP, Ripple’s digital asset, is not a security and that most transactions involving XRP were legal. This decision dates back to December 2020, when the SEC filed a lawsuit against Ripple for allegedly selling XRP as an unregistered security.
Besides the Ripple case, the SEC has experienced other legal defeats. Notably, it lost a case against Grayscale Investments regarding an application to create an exchange-traded fund (ETF) in . These defeats exposed inconsistencies in the SEC’s regulatory approach, sparking debate over its current strategies under Mr. Gensler’s leadership.
Mr. Alderoty drew a parallel between Mr. Gensler and a character in the movie “A Few Good Men,” suggesting that the SEC chairman was withholding important information during a meeting of felons. This criticism highlights tensions between Ripple and the regulator following prolonged litigation.
The potential $770 million penalty imposed by the SEC on Ripple may be reduced given these recent developments. Factors such as excluding non-US sales of XRP and incorporating legitimate business expenses could mitigate the fine.
The court’s findings drew attention to the SEC’s enforcement tactics and regulatory clarity in the digital asset space. As these legal battles unfold, industry observers are closely watching how they will shape future regulatory frameworks for cryptocurrencies and related investment products in the United States.
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