Regulation
The ongoing legal battle intensifies with new accusations
During Ripple vs. SEC saga, each day brings a new twist, leaving the XRP community eagerly awaiting a resolution. Ripple claims the SEC is expanding its cryptocurrency regulatory reach using vague laws, while the SEC counters with what Ripple sees as manipulative tactics and unfair moves.
Stuart Alderoty, Ripple’s Chief Legal Officer (CLO), recently criticized the SEC’s handling of the XRP case, shedding light on what he believes are unfair practices and the broader challenges faced by the cryptocurrency industry.
Now, what is the new drama about? We won’t keep you waiting. Dive right in.
Allegations of misconduct
After a long battle with the SEC, Alderoty found intriguing parallels between the SEC’s actions and the absurdities depicted in Franz Kafka’s novel, “The Trial,” accusing the regulator of engaging in illegal activities. Ripple argues that the SEC’s approach lacks transparency and fairness, echoing sentiments shared by other cryptocurrency giants such as Robinhood and Coinbase.
Comprehension Ripple’s smart legal strategy
To safeguard its interests, Ripple has filed motions to seal sensitive financial documents before making them public. These documents contain crucial information on earnings, revenues, expenses, and the discounted rates at which XRP was sold to institutional investors. Ripple claims that disclosing such sensitive data would not only jeopardize its business interests but also compromise privacy.
Discuss the $2 billion request
At the heart of the case is the SEC’s request for $2 billion in fines from Ripple for allegedly selling XRP to institutional investors. However, Ripple’s legal team strongly disputes this claim, arguing for a $10 million cap on any civil fine.
They argue that the SEC’s request is excessive, especially considering the absence of any loss of customers, and insist that Ripple should not be forced to pay such a large sum through illegal means.
Regulations remain an urgent concern
Alderoty’s criticism highlights broader tensions between regulatory enforcement and business operations in the cryptocurrency realm. Ripple, along with other crypto entities, is grappling with what it perceives as inconsistent feedback from the SEC, complicating their efforts to comply with regulatory mandates.
Ripple’s legal battle has also brought to the fore the US government’s efforts to rein in the SEC regulator. Alderoty praises the House of Representatives’ bipartisan efforts to limit the SEC’s influence on cryptocurrency regulation.
Notably, the House recently voted to rescind Staff Accounting Bulletin No. 121 (SAB 121) of the SEC, which requires financial institutions to include customers’ cryptocurrency holdings on their balance sheets.
Implications for the cryptocurrency industry
Ripple’s standoff with the SEC carries significant ramifications for the broader cryptocurrency landscape. In particular, the SEC’s scrutiny of Ripple’s future stablecoins sheds light on its regulatory intentions, with potential implications for the regulation of digital assets generally.
Finally, Alderoty’s claims against the SEC are clear and significant. The SEC’s success will have a negative impact on the cryptocurrency market because the labeling of XRP as a security will burn many other assets awaiting similar judgments.
Read also: Ripple Grants $1.05 Million to Morgan State for Blockchain Research
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