Ripple’s Chief Legal Officer, Stuart Alderoty, discusses the SEC’s withdrawal of its case against Ripple, indicating a significant shift in the agency’s approach to cryptocurrency regulation. Alderoty states that enforcement actions require clear regulatory guidelines, a point Ripple has long championed. With legal hurdles seemingly cleared, Ripple is ready to focus on business, and plans to collaborate with lawmakers to establish smart crypto regulations that bolster consumer protection and innovation.
In a recent update from Ripple’s Chief Legal Officer, Stuart Alderoty, the landscape of cryptocurrency in the United States appears to shift. During a brief, yet impactful, video statement, Alderoty highlighted the U.S. Securities and Exchange Commission’s (SEC) strategic retreat from its case against Ripple. He asserted, in no uncertain terms, that this decision indicates a broader withdrawal of all cases against crypto entities in the nation. This move has significant implications for the future of crypto enforcement.
Essentially, Alderoty articulated that the SEC has recognised a crucial point long advocated by the cryptocurrency community. Enforcement actions, he noted, cannot proceed in absence of established and clear regulatory frameworks. “You can’t bring enforcement actions for violating the law without first explaining what the law is,” he asserted firmly. This acknowledgment underscores the lack of defined rules governing cryptocurrency transactions in the U.S.
Throughout Ripple’s protracted legal saga, it has consistently argued that the SEC attempted to exert control through enforcement rather than through established legislative processes. Since the case commenced in December 2020, much attention has focused on whether XRP should be categorised as a security, making it one of the most scrutinised cases within the crypto realm.
Now, with the legal hurdles removed, Ripple is poised for a fresh start, as Alderoty revealed the company’s forward-looking strategy. He indicated, “We’re going to clean up the mess, we’re going to get out of the courtroom, we’re going to get back to running business.” Ripple aims to collaborate with Congress to foster regulations that not only protect consumers and the market’s integrity but also encourage innovation in the sector.
Earlier in 2023, Ripple achieved a partial legal victory; the court deemed institutional sales of XRP legal, though it ruled that XRP transactions on public exchanges had breached securities laws. Ripple had previously earmarked $125 million for potential penalties, which CEO Brad Garlinghouse has indicated he will reclaim in light of recent developments.
Garlinghouse expressed his confidence regarding Ripple’s legal standing, asserting, “I think it’s just evidence that the former [Gary] Gensler SEC was on the wrong side of the law.” This shift coincides with new leadership at the SEC and the White House, signaling a notable change in regulatory approach.
Ripple’s legal resolution has arrived right when the company is pursuing aggressive growth strategies. Recently, Ripple completed a significant $1.25 billion acquisition of Hidden Road, setting the stage for expanded operations. Both Alderoty and Garlinghouse’s remarks underline the evolving role of the SEC, now led by chair Paul Atkins, a Trump appointee, amidst a broader reevaluation of cryptocurrency oversight in the United States.
Interestingly, Ripple has historical ties to political contributions, having notably supported Donald Trump with millions in donations and even providing at least $5 million in XRP tokens during the inauguration held on January 20. Such connections unavoidably surface when discussing Ripple’s interactions with regulatory bodies and enforcement actions.
