Since the verdict in the XRP lawsuit in July 2023, the US SEC has been on a downward trajectory, raising questions it’s legal allegiance.
Stuart Alderoty, the Chief Legal Officer of Ripple, expressed concern regarding the U.S. Securities and Exchange Commission’s (SEC) recent losing streak in court cases under the direction of Gary Gensler.
His remarks come in the wake of the Commission’s latest setback in a fifth circuit court, which followed the Commission’s triumph in the XRP lawsuit in July 2023.
The US SEC’s Rule “Arbitrary and Capricious”
The U.S. Court of Appeals for the Fifth Circuit ruled that the Commission’s rule on stock buyback disclosure was arbitrary and capricious on October 31, 2023. In addition, the Court provided the agency with an opportunity to demonstrate that it “reasonably considered the relevant issues and reasonably explained the decision.” This comes after the SEC’s recent losses in XRP lawsuit and Grayscale filing, which could prove to be key for the crypto ecosystem’s regulatory standing in the years to come.
The lawsuit was filed by various business and commerce associations in the United States against an SEC rule requiring issuers to report daily share repurchase data quarterly and to disclose the reason why the issuer repurchased its stock.
Chief Counsel of Ripple: “Very Troubling Pattern”
Ripple’s Stuart Alderoty characterized the development as a “very troubling pattern” of Gary Gensler’s SEC disregarding strict adherence to the law.
“Another day and another Court finds that the SEC again acted arbitrarily and capriciously. Is anyone else concerned about this very troubling pattern of the SEC flouting any faithful allegiance to law under Mr. Gensler?”
In the Ripple vs. U.S. SEC lawsuit, earlier on October 25, 2023, Judge Analisa Torres issued an order dismissing charges against Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen.
In addition, there has been progress in institutional XRP transactions. Judge Torres requested a joint scheduling brief from the litigants. The July 13, 2023, Summary Judgment was a split verdict, with the ruling granting a victory to Ripple on the retail sale of XRP tokens.
