News - Appeal may strengthen Ripple victory, says Ripple Labs
Stuart Alderoty thinks that if the SEC appeals, the court could further consolidate Ripple Labs' partial victory over the financial regulator.
Concerns about a possible appeal by the U.S. regulator of the landmark Ripple ruling earlier this month are hereby dismissed by Ripple's legal director. During a TechCrunch podcast on July 26, Alderoty reiterated his position that the XRP token is not a security and that the Ripple team is not shying away from a possible SEC appeal in court. On July 13, Judge Analisa Torres ruled that XRP is not a security when sold publicly on exchanges, but can be treated as such when sold to institutional investors. On July 21, the SEC used its ongoing case against Terraform Labs founder Do Kwon to vent frustrations over the ruling. The SEC hinted that they will appeal the ruling in the future.
30+ years as a lawyer, and crypto is, without a doubt, the most fascinating industry I’ve been a part of.— Stuart Alderoty (@s_alderoty) July 25, 2023
Thank you @jacqmelinek for having me on to discuss what the lawsuit decision means, where the SEC has jurisdiction (and more importantly where it doesn’t), and much more. https://t.co/lozorZeTyL
Stuart Alderoty said during the podcast: "We think the judge was right, and we think this was a proper application of the law, and I think a court will not only confirm that, but perhaps extend it even further." In light of the ruling, Alderoty predicted that if the SEC continues to assert that crypto assets are securities, it will lose similar cases.
SEC Chairman Gary Gensler expressed disappointment with the court's decision on XRP, adding that the regulator would continue to review the ruling.
"With all due respect, the partial rulings on Ripple were wrongly decided, and the Court should not follow this decision....SEC staff are considering the various avenues of appeal," SEC lawyers said.
"Our case and the decision of our judge [Torres] will give other judges comfort that the SEC was simply misled."
It's outrageous that in today's Senate hearing, Mr. Gensler again misstates the law (and the Howey test), suggesting that tokens, standing alone, are investment contracts. Is the SEC really going to continue to be allowed to peddle these falsehoods?— Stuart Alderoty (@s_alderoty) July 19, 2023
Despite his optimism, Alderoty warned that the crypto sector is still a long way from solid regulation. He condemned the SEC's approach and the overall crypto laws in the U.S. compared to other jurisdictions.
"We still need a rational, comprehensive and comprehensible regulatory framework for crypto in the U.S.," he said. "Because of the SEC's refusal to faithfully apply the law [...] the U.S. has fallen visibly behind the rest of the world."
Ripple XRP has risen 40% in the past month and is currently worth approximately 70 cents.