Stuart Alderoty, general counsel of Ripple, stated to a news correspondent “First Mover” that he sees “the beginning of the end” because the SEC’s case has failed after two years of litigation.
The legal conflict involving the U.S. If a federal judge rules that the cryptocurrency startup did not break federal securities laws, the Securities and Exchange Commission’s (SEC) and Ripple Labs’ dispute may soon be over.
According to Stuart Alderoty, general counsel at Ripple Labs, the case, which started in 2020, may finally be “at its beginning of the end” and the cryptocurrency business is feeling “assured.”
“Fraud claims are not made in this case. No complaints of misrepresentation have been made. It really is a technical problem, and we feel it can be settled as a matter of law by the judge, Alderoty stated during an appearance on news interview “First Mover,” “There are no claims of market manipulation.”
Motions for summary judgment have been submitted to the U.S. by both Ripple and the SEC. in an effort to avert a full trial, District Court for the Southern District of New York. All attempts were made to contact the SEC for comment, but no answer was received at the time of publication.
The SEC filed a lawsuit against Ripple Labs in December 2020, alleging that the business sold XRP, a cryptocurrency intimately associated with it, in unregistered securities transactions. According to the SEC, the business offered XRP tokens while giving investors false hope that they would receive a sizable return on their investment.
Alderoty, who has been with Ripple for almost four years, reaffirmed his position that the company does not meet the criteria outlined by the Howey Test in a U.S. Court of Appeals case. The test aids in determining whether something qualifies as a security and, hence, a “investment contract.”
According to Alderoty, “we think that without a contract for an investment, there is no case and actually no authority for the SEC to even weigh in.” “We think they flunk the Howey Test on every single prong,”
Aldertoy continued by stating that there were no post-sale promises made by Ripple to investors and that the SEC does not “find any contract for an investment between Ripple and an XRP holder.”
A common interest is not a replacement for a common enterprise, as the SEC is implying, according to Alderoty. We haven’t promised any XRP holders that we will act on their behalf or are required to act on their behalf to do those things.
Was Ripple stood out among the various initiatives in the cryptocurrency ecosystem? He claimed that the SEC might have used the company as an example. Alderoty said that as a result of the fallout, “virtually every U.S. exchange delisted or suspended trading in XRP,” wiping out the company’s “$15 billion in market valuation” and forcing it to shift its activities “offshore.”
Alderoty speculated that “perhaps they [the SEC] thought they [could] convey a bigger message to the entire market.” However, I believe that they have learned that if you question a well-resourced company, that well-resourced firm can mount a very strong defense and truly show that the SEC is not following the law in this instance.
According to Alderoty, the SEC is “trying to change the law.” Instead of being loyal to the law, “they are engaged in litigation conduct to further the desired conclusion.”