Ripple’s Chief Legal Officer expresses concern over the SEC’s recent courtroom losses, questioning the agency’s approach to cryptocurrencies amid legal setbacks.
Key Takeaways
- SEC faces a series of courtroom losses, including the XRP lawsuit and Grayscale case.
- Fifth Circuit court gives SEC 30 days to prove its actions in a recent lawsuit.
- Ripple’s Chief Legal Officer expresses concerns over SEC’s legal woes.
- Judge Torres takes significant steps in Ripple vs. SEC lawsuit.
The U.S. Securities and Exchange Commission (SEC) has been grappling with a series of legal setbacks, raising questions about its handling of the crypto industry. It all started with a court decision in July 2023 concerning XRP, which left the SEC in a precarious position. Subsequently, the Grayscale case delivered another blow, with a judge criticizing the SEC’s denial of Grayscale’s plan as “arbitrary and capricious.”
SEC Left With a 30-day Opportunity
The most recent setback for the SEC came from the U.S. Court of Appeals for the Fifth Circuit. The court sided with several business groups, including the U.S. Chamber of Commerce, who had filed a lawsuit, claiming that the SEC had not adequately considered input during a notice-and-comment period. They also argued that the SEC failed to substantiate its claims about the rule benefiting the public.
Ripple’s Legal Chief Expresses Concerns Over SEC’s Losseshttps://t.co/zQQTJDLpzr
— John Morgan (@johnmorganFL) November 2, 2023
On October 31, 2023, the court ruled that the SEC had acted “arbitrary and capricious” by ignoring petitioners’ comments and failing to conduct a proper cost-benefit analysis. Now, the SEC has been given a 30-day window to demonstrate that its actions were justified.
Sounds Troubling Pattern for SEC
Ripple’s Chief Legal Officer, Stuart Alderoty, did not hesitate to express his concerns about the SEC’s recent legal woes. He characterized the situation as a “very troubling pattern” where the SEC appears to be departing from legal principles.
In another development related to the ongoing Ripple vs. SEC lawsuit, Judge Analisa Torres issued an order on October 25, 2023. This order pertains to the SEC’s decision to drop charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen. Judge Torres has called for a joint scheduling brief from both parties, marking a significant step following the split verdict on July 13, 2023, which favored Ripple in the case involving the retail sale of XRP tokens.
Overall
The SEC’s recent string of courtroom losses has cast a shadow over its regulatory authority in the crypto world. These legal setbacks raise important questions about the SEC’s approach to cryptocurrencies and its ability to enforce regulations effectively.
Stuart Alderoty’s concerns reflect the growing unease within the industry regarding the SEC’s actions and decisions. The forthcoming developments in the Ripple vs. SEC lawsuit will be closely watched, as they have the potential to further shape the regulatory landscape for cryptocurrencies.
