Ripple’s Chief Legal Officer Unveils Major Misconduct Allegations Against SEC

Ripple’s Chief Legal Officer Unveils Major Misconduct Allegations Against SEC
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In the recent SEC v. Coinbase hearing, Ripple’s Chief Legal Officer, Stuart Alderoty, has exposed what he alleges to be significant misconduct by the SEC. Alderoty’s claims, made via social media, add a new layer of intrigue to the already high-stakes legal battle.

The central issue revolves around the SEC’s allegations that Coinbase sold unregistered securities, a charge that the cryptocurrency exchange has vehemently contested. However, Alderoty’s post disputes the SEC’s perspective, contending that their emphasis on whether investors are “amalgamating their funds with the efforts of the promoter” is inherently inaccurate.

Alderoty cites the influential Revak case, arguing that the Howey test requires more than mere investment in effort; it demands an investment in a common enterprise. This argument adds a new dimension to the ongoing legal battle, potentially shifting the focus of the case.

The recent hearing, which has garnered attention from the global financial community and the cryptocurrency market, featured incisive inquiries from Judge Failla. She specifically queried the SEC regarding cryptocurrencies such as Solana (SOL) and Cardano (ADA), which were mentioned in the lawsuit, and whether they contravened securities regulations. The SEC’s lawyers argued that these tokens are simply computer code, a statement that elicited a knowing grin from Judge Failla.

Ripple’s CLO: SEC Draws a Line Between Bitcoin and Other Cryptocurrencies

Ripple’s Chief Legal Officer Unveils Major Misconduct Allegations Against SEC

The SEC said that the 13 cryptocurrencies mentioned in the lawsuit were classified as securities at the time of their launch. The SEC explained that this classification was due to investors purchasing these tokens with the anticipation of gaining profits from the respective ecosystems tied to each cryptocurrency. 

However, the SEC’s legal representatives clarified during the same hearing that Bitcoin (BTC) does not fall under the category of a security. The rationale behind this distinction is the absence of an associated ecosystem behind Bitcoin.

As the legal proceedings move to the next phase, which involves Judge Failla interrogating Coinbase, the exchange is confronted with the potential of the judge rejecting their plea, propelling the case into the evidence-gathering phase. Following this phase, both the SEC and Coinbase maintain the right to submit a request for a summary judgment.

Talking about Ripple, XRP has shown some interesting movements recently. On Saturday, it saw a rise of 1.65%, which offset the previous day’s loss of 1.34%, and closed at $0.5533. This marked the end of a three-day downward trend for XRP. However, the start of the week wasn’t as promising, with XRP’s value falling close to 5% on Monday, bringing its trading price down to $0.5286.

This development is a significant milestone in the ongoing legal battle between the SEC and cryptocurrency exchanges. The verdict of this lawsuit could potentially influence the trajectory of the cryptocurrency sector in significant ways. As the legal proceedings continue, all eyes will be on the courtroom, awaiting the next twist in this high-stakes legal drama.


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