Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has signaled that the U.S. Securities and Exchange Commission (SEC) may still pursue an appeal against the firm despite the recent settlement.
Notably, the case, which has been a significant legal landmark in the cryptocurrency industry, saw Ripple ordered to pay $125 million in fines earlier this month, a fraction of the $2 billion initially sought by the SEC.
The lawsuit, filed in December 2020, accused Ripple of selling XRP in violation of federal securities laws. After nearly four years of legal proceedings, Judge Analisa Torres ruled in favor of Ripple, noting that the company had not violated any laws through its sales of XRP to exchanges, which then sold the token to retail clients. However, the judge found Ripple guilty of violating securities laws in its direct sales of XRP to institutional clients, leading to the $125 million fine.
In a recent interview on the CryptoLaw YouTube channel, Alderoty emphasized that the ruling not only brings finality to the case but also marks a critical victory for Ripple and the broader cryptocurrency industry.
“We were very happy to have received this ruling; it represents finality. It’s a final judgment, and we do view it as a win,” Alderoty stated.
He further pointed out that the court rejected the SEC’s claims that Ripple acted recklessly and reminded the regulator that there were no allegations of fraud or victims in the case.
However, despite the settlement, Alderoty expressed concerns that the SEC might still appeal the decision, noting that the SEC has often acted irrationally in cryptocurrency-related matters.
“The SEC has proven itself not to be rational in fact the court in our case criticized the SEC for engaging in litigation gamesmanship and tactics rather than faithfully applying the law; So, I wouldn’t be surprised if the SEC does appeal,” he added.
The lawyer further pointed out that even if the SEC decides to appeal, the legal standing that XRP is not a security in the secondary market remains unchanged, emphasizing that “if the SEC were a rational actor, they should just move on from this case.”
Alderoty also criticized the SEC’s approach, suggesting that the regulator has overreached in its efforts to control the cryptocurrency industry. He argued that the case had not advanced the SEC’s core mission of protecting investors, as there were no victims or losses in the transactions under scrutiny. Instead, he suggested that the SEC’s actions have harmed retail XRP holders by creating uncertainty in the market.
Looking ahead, Alderoty emphasized the need for clear and rational legislation for the cryptocurrency industry, suggesting that the current regulatory environment stifles innovation and growth in the U.S.
