Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has criticized the U.S. Securities and Exchange Commission (SEC) and its outgoing Chair, Gary Gensler, for continuing aggressive litigation against Binance as a leadership transition looms.
On Wednesday, the SEC filed an 81-page brief accusing Binance of offering unregistered securities, including its native token, BNB, and ten other assets like Solana (SOL), Cardano (ADA), and Polygon (MATIC).
Alderoty condemned the SEC’s actions, labeling them a rehash of weak arguments, including the claim that cryptocurrencies lack intrinsic value. He has consistently advocated for modernized, transparent crypto regulations and criticized the SEC’s reliance on outdated interpretations, such as the Howey Test, to categorize assets.
Under Gensler, the SEC has faced backlash for adopting a heavy-handed enforcement strategy rather than establishing frameworks to support the crypto industry. This approach has drawn widespread criticism from the crypto community.
Pro-XRP attorney John Deaton argued that intrinsic value is irrelevant under the Howey Test when determining whether an asset is a security. Another community member, Chintokkong, differentiated between assets and securities, emphasizing that assets like gold or cryptocurrencies are not securities, even if financial instruments based on them might be.
Ripple itself has been embroiled in an SEC lawsuit since December 2020, accused of selling XRP as an unregistered security. In a landmark ruling in July 2023, the court determined that XRP is not a security in retail sales. However, Ripple was penalized $125 million for institutional sales, highlighting the ambiguity in crypto regulations.
Conclusion
The SEC’s continued enforcement actions under Gensler have fueled frustration in the crypto industry, underscoring the urgent need for regulatory clarity. With the appointment of pro-crypto Paul Atkins as the next SEC Chair, the community hopes for a shift toward balanced and constructive oversight, enabling innovation while protecting investors.
Victor Swaezy
Victor Swaezy is a crypto-journalist with more than 3 years of experience in covering blockchain technology and digital currencies news. Known for his comprehensive reporting, Victor has contributed to leading industry publications, providing market participants with the required knowledge to make informed decisions. When he is not working, he loves to watch movies and have a good time.