Stuart Alderoty, the Chief Legal Officer (CLO) of Ripple, has expressed optimism regarding the company’s progress in the SEC lawsuit. This statement came shortly after the SEC publicly submitted its redacted remedies-related reply and supporting briefs in response to Ripple’s opposition. Alderoty believes that the SEC’s remedies reply brings Ripple closer to resolving the lawsuit.
However, Alderoty also acknowledged that while Ripple is nearing the end of the SEC lawsuit, it is unfortunate that other crypto businesses are just beginning their legal battles against the regulatory agency.
The SEC v. Ripple lawsuit officially began in December 2020 when the regulator charged Ripple with violating U.S. securities laws by offering and selling XRP as an unregistered security. This legal battle had a significant impact on Ripple’s business and its affiliated cryptocurrency XRP, particularly in the U.S. As a result, Ripple shifted its business strategy to focus on non-U.S. clients, while multiple trading platforms in the country, including Coinbase and Kraken, delisted XRP.
Interestingly, these exchanges later relisted XRP after Judge Analisa Torres ruled that XRP programmatic sales were non-investment contracts.
The lawsuit has been ongoing for nearly three and a half years, but the SEC’s final reply brings Ripple one step closer to the end of this prolonged legal battle. Following the SEC’s reply, Judge Torres will schedule a date to issue the final verdict. Crypto expert Ashley Prosper predicts that the verdict will likely be released between July and September.
While Ripple is nearing the end of its legal battle, other crypto-related businesses such as Coinbase, Binance, and Kraken are just beginning their own battles with the SEC. Furthermore, the SEC has issued a Wells Notice to Ethereum and Robinhood, indicating that an enforcement action is imminent.
Alderoty criticized the SEC’s remedies reply, accusing the regulator of not faithfully applying the law in an attempt to deceive the judge. However, he still expects the judge to be impartial and fair in her remedies ruling.
In a tweet following the SEC’s filing, Alderoty highlighted that the SEC disregarded other international financial regulators. He argued that the SEC likened crypto licenses issued by these regulators to mere fishing licenses. He shared an excerpt from the SEC’s reply brief, which indirectly made this characterization.
The SEC stated in its reply, “This argument [Ripple’s use of licenses obtained from other jurisdictions to support its claim of not planning to violate U.S. securities laws in the future] is akin to saying a New York restaurant need not obtain a liquor store license because it obtained a fishing license in California.”
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