Ripple General Counsel Says SEC Doesn’t Have Power to Label XRP Security

Stuart Alderoty said the SEC hasn’t labeled XRP security and does not have the power to do so.

Stuart Alderoty, Ripple’s General Counsel, has reacted to a New York Times article dubbed “Inside a Crypto Nemesis’ Campaign to Rein In the Industry.” In the article, the New York Times noted that Ripple was charged with offering “unregistered securities” by the SEC. 

“A federal judge is expected to rule in the coming months in a lawsuit brought by the S.E.C. that charges the cryptocurrency issuer Ripple with offering unregistered securities,” the New York Times reported. 

Ripple’s General Counsel Reacts

The comment did not sit well with Alderoty, who quickly corrected the New York Times. According to Alderoty, the SEC neither labeled XRP security nor has the power to do so. 

“To be clear, the SEC hasn’t labeled XRP a security, nor does it have the power to do so,” he said. 

The Ripple General Counsel said the Securities and Exchange Commission could only ask the court whether XRP is a security, and the court will answer the question.

To be clear, the SEC hasn’t labeled XRP a security, nor does it have the power to do so. One Judge put it this way: the SEC can only ask the question and the court ultimately answers. https://t.co/oMUjZwBkZo

— Stuart Alderoty (@s_alderoty) November 21, 2022

Alderoty Face Off With the SEC

Alderoty is known for always criticizing the SEC under the leadership of Gary Gensler, the federal agency’s Chairman. In September, he lashed out at Gensler for appointing himself as the cop on the beat for crypto. 

According to Alderoty, the SEC is more concerned about protecting its turf at the expense of investors, who the agency is supposed to protect. Alderoty described the SEC’s lawsuit against Ripple as a rug pull against investors. 

Meanwhile, the NYT was said to have gone easy on Gensler in the article, which comes less than a week after the media outlet chose not to blame Sam Bankman-Fried (SBF) for the sudden collapse of FTX.

Fresh off its SBF puff piece, the NYT goes easy on Gary Genslerhttps://t.co/ZRKUAywsOM

— Jeff Roberts (@jeffjohnroberts) November 21, 2022

Stronger Crypto Regulations Could Have Prevented FTX Fall

Per multiple sources, FTX execs led by SBF allegedly misappropriated customers’ funds, which left a hole of $8 billion in its balance sheet. The United States Justice Department and the SEC are investigating whether SBF illegally lent billions of dollars to Alameda Research, a company owned by the former FTX CEO.  Notably, the FTX collapse left many investors in huge losses, as the effect of the exchange’s implosion spread across the entire market. However, many experts believed FTX’s collapse could have been prevented without stronger crypto regulatory frameworks.

As reported, the Senate Agriculture Committee will hold an FTX hearing on December 1. Commenting on the upcoming FTX hearing, Susan Friedman, Ripple’s Head of Public Policy, said: 

“Hoping this serves as the catalyst for substantive movement on the crypto policy front in the 118th Congress. Stronger regulatory frameworks enacted globally could have prevented the FTX situation from occurring in the first place.”