- Ripple’s Chief Legal Officer, Stuart Alderoty, calls attention to the SEC’s series of legal losses, describing it as a “very troubling pattern” under Chair Gary Gensler’s leadership.
- The U.S. Court of Appeals for the Fifth Circuit’s recent decision declared the SEC’s rule on stock buyback disclosure “arbitrary and capricious,” adding to the Commission’s string of legal setbacks.
In the aftermath of the split decision in the XRP lawsuit in July 2023, the U.S. Securities and Exchange Commission (SEC) finds itself under scrutiny. Ripple’s Chief Legal Officer, Stuart Alderoty, recently expressed his concerns over what he perceives as a discernible pattern of the SEC losing its legal battles, particularly under the leadership of Gary Gensler.
Navigating Legal Landscapes: A Look at SEC’s Recent Challenges
This commentary follows closely on the heels of a setback for the SEC in the Fifth Circuit Court. On October 31, 2023, the court deemed the Commission’s rule on stock buyback disclosure to be
“arbitrary and capricious.”
Furthermore, the court afforded the agency an opportunity to substantiate its decisions and to demonstrate that it has
“reasonably considered the relevant issues and reasonably explained the decision.”
This decision is part of a series of legal hurdles for the SEC, including the recent losses in the XRP lawsuit and the Grayscale filing, both of which bear significant weight for the future regulatory landscape of the cryptocurrency ecosystem.
A Closer Look at the Ripple Legal Chief’s Concerns
Stuart Alderoty highlighted the consistent pattern of the SEC’s legal defeats, drawing attention to what he perceives as a deviation from a
“faithful allegiance to law”
under the watch of SEC Chair Gary Gensler.
“Another day and another Court finds that the SEC again acted arbitrarily and capriciously. Is anyone else concerned about this very troubling pattern of the SEC flouting any faithful allegiance to law under Mr. Gensler?”
Alderoty remarked in response to the SEC’s most recent legal challenge.
Further tracing back to the events of the Ripple vs. U.S. SEC lawsuit, Judge Analisa Torres officially dropped the charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen on October 25, 2023. This development, coupled with ongoing discussions regarding institutional sales of XRP, underscores the heightened attention on the SEC’s legal strategies and their implications for the cryptocurrency industry.
The July 13, 2023, Summary Judgment, which resulted in a split verdict, ultimately culminated in a victory for Ripple concerning the retail sale of XRP tokens. This outcome not only marks a significant milestone for Ripple but also adds to the growing conversation about the SEC’s legal allegiance and effectiveness in navigating the complex landscape of cryptocurrency regulation.
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