- Ripple’s top executives, CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty, criticize the SEC following recent court decisions that didn’t go in the regulator’s favor.
- Garlinghouse calls it a “Summer of Justice,” signaling a wave of legal wins for the crypto industry against the SEC, including Grayscale and Ripple itself.
The Fallibility of the SEC: A Legal Perspective
The current legal landscape for cryptocurrencies is a complex labyrinth of regulatory rulings, making every court decision a potential game-changer. Two recent landmark cases have emboldened Ripple’s executive leadership, leading them to publicly denounce the Securities and Exchange Commission (SEC) for what they see as inconsistent and flawed regulatory actions.
The SEC is getting battered in the court. In our case it's been proven wrong, been called hypocritical, lacking faithful allegiance to the law, fined for discovery abuses and now another distinguished court saying it’s "arbitrary and capricious" – that’s a really big deal. https://t.co/RidAojtZCJ
— Stuart Alderoty (@s_alderoty) August 29, 2023
Ripple and Grayscale: Conjoined Legal Victories
In the latest turn of events, the District of Columbia Court of Appeals directed the SEC to reevaluate its earlier rejection of Grayscale’s application for a spot Bitcoin exchange-traded fund (ETF). This order comes on the heels of a partial victory that Ripple itself recently secured against the SEC.
The wins for both Ripple and Grayscale have led to jubilant reactions from the crypto community, and more specifically, from Ripple’s CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty. Both executives were vociferous in their criticism of the SEC’s strategies and outcomes in these cases.
While these are great outcomes… and it’s feeling like a summer of justice…
it’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently WRONG on the facts and the law. https://t.co/sdZpaO4coh
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— Brad Garlinghouse (@bgarlinghouse) August 29, 2023
Alderoty pointed out that the SEC has suffered legal setbacks not only in its case against Ripple, where the court chastised the regulator for being “hypocritical” and “lacking faithful allegiance to the law,” but also in the Grayscale case, where its decision was termed “arbitrary and capricious.”
The Regulatory Dilemma
The severity of the language used by the courts against the SEC implies more than just isolated courtroom defeats; it reflects a broader issue concerning the SEC’s approach to crypto regulation. Alderoty accuses the SEC of attempting to regulate the crypto sector through enforcement actions rather than through a clearly defined legal framework.
Moreover, Garlinghouse expressed his disapproval that cryptocurrency businesses in the U.S. have to resort to legal action to expose the SEC’s inadequacies. He tagged the string of legal victories as a “Summer of Justice,” which underscores the sentiment that the tide is turning against the SEC’s previously unchallenged authority in crypto regulation.
While Ripple’s fight with the SEC is far from over and may well extend for another couple of years, especially with the SEC planning to appeal certain decisions, these recent events clearly indicate a shift in the crypto-legal narrative. Both Ripple and Grayscale victories could serve as seminal cases that challenge the SEC’s standing in the cryptocurrency domain.
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