Ripple General Counsel Slams SEC Chairman’s Recent Testimony Says “Does He Really Know The Law”

Ripple General Counsel Question SEC Chairman’s Interpretation of Supreme Court’s Security Test.

Ripple General Counsel Slams SEC Chairman’s Interpretation of Supreme Court’s Security Test.

Stuart Alderoty, the General Counsel at Ripple, has banged SEC Chairman Gary Gensler for misinterpreting the U.S. Supreme Court test to determine what should be a security. 

The general counsel of the leading blockchain company made this known in a tweet today, saying that he could not ascertain why Gensler misstated the Supreme Court’s test. 

He wondered whether Gensler misstated the test intentionally or if the misinterpretation was because the SEC chair did not understand the law. Alderoty posed a question to his followers to determine which of the scenarios could be worse. 

“In today’s Senate Banking Committee hearings, Chair Gensler misstated the Supreme Court test to determine what is and isn’t a security,” Alderoty said. 

In today’s Senate Banking Committee hearings, Chair Gensler misstated the Supreme Court test to determine what is and isn’t a security. Was it intentional or does he really not know the law? Which is worse?

— Stuart Alderoty (@s_alderoty) September 16, 2022

Reactions to the Question

The question raised by Alderoty has prompted many responses from cryptocurrency enthusiasts, with many people stating their views on the issue. 

Attorney James K Filan said: “There are no accidents.”

#XRPCommunity #XRP from @s_alderoty ? There are no accidents. https://t.co/Y836xk98sR

— James K. Filan ???? 112k (beware of imposters) (@FilanLaw) September 16, 2022

LBRY, a crypto-related company currently in a legal battle with the Securities and Exchange Commission, also replied: “Your tact is admirable, but we all know which one it was.”

Gensler Defends SEC’s Regulatory Stance on Crypto

Alderoty’s view on Gensler’s comment comes a few hours after the SEC boss defended the agency in front of the U.S. Senate Banking Committee. 

Gensler noted at the hearing that aside from Bitcoin, all cryptocurrencies fit the definition of security and should be registered accordingly. 

He commented after skeptical senators noted that there is a possibility that some cryptocurrencies could be classed as conventional stocks. 

Pat Toomey (Penn.), the top Republican on the panel, said: 

“Crypto tokens have varying degrees of decentralization, they usually do not have a financial claim on the issuer […] These are very major and important differences from traditional securities, and they merit a clearly stated and tailored regulatory framework.” 

Responding to the Senators’ concerns, Gensler said the Supreme Court had already put to rest the argument on what assets should be classed as a security. 

The SEC chair said many factors can be used to ascertain security, adding: “It’s not one spectrum of decentralization versus decentralization.”