- Ripple’s CLO criticized the U.S.SEC for the repeated use of the term “crypto asset security”.
- Alderoty challenged SEC’s Wells Notice to the Open Sea threatening a legal action.
Ripple’s Chief Legal Officer, Stuart Alderoty, has openly criticized the U.S. Securities and Exchange Commission (SEC) for its repeated use of the term “crypto asset security”.
Alderoty in his X post stated,
“The term ‘crypto asset security’ is nowhere to be found in any statute, it’s a fabricated term with no legal basis. The SEC needs to stop trying to deceive judges by using it.”
Initially, the SEC sought $2B in penalties for Ripple’s XRP sales, but a judge recently reduced the fine to $125M. Alderoty expressed satisfaction, emphasizing Ripple’s commitment to defending both its interests and the crypto industry.
Alderoty publicly challenged the SEC’s recent actions, particularly its Wells Notice to OpenSea, the world’s largest NFT marketplace. OpenSea CEO Devin Finzer revealed that the SEC is threatening legal action, claiming NFTs on the platform are unregistered securities.
SEC Criticized Amid Ongoing Legal Battles
Recently, in an August 30 filing, the SEC warned it could challenge any plan by the FTX to use stablecoins in repaying creditors. The regulator referred to these stablecoins as part of a portfolio containing “crypto asset securities.”
Moreover, in an August update on the SEC’s legal battle with crypto exchange Kraken, the Federal Court for the Northern District of California criticized the use of “crypto asset security,” calling the concept “unclear at best and confusing at worst.”
Alderoty referenced a 1976 SEC decision where the agency ruled that art galleries did not need to register as securities, even if buyers had investment motives. The ruling was specific to a case involving the sale of lithographs by the Art Appraisers of America on behalf of artist William Nelson.
Alderoty sees the SEC’s current stance as part of a broader “war on crypto”, waged through the courts. He believes the recent court rulings, including the reduced penalty for Ripple and the dismissal of the SEC’s $2 billion demand, provide clarity and finality that will benefit the entire crypto industry.
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