Ripple General Counsel Says Experts Agree SEC Lawsuit Outcome Will Determine Crypto Future

The outcome of the Ripple case will affect the future of cryptocurrencies in the U.S., says Alderoty.

Ripple’s general counsel Stuart Alderoty has reacted to a recent Bloomberg article titled: “Fight to Regulate Crypto at Crossroads as Ripple Ruling Looms.” The article, published yesterday, explains how an upcoming Ripple v. SEC lawsuit ruling will determine which federal agency, between the SEC and CFTC, should regulate the industry.

Bloomberg, in reference to the lawsuit between the SEC and Rippe, said:

“An upcoming ruling in New York federal court could help determine the answer, along with the fates of numerous crypto investors and companies. The case hinges on whether a prominent digital token should be treated as a security, which would fall under the Securities & Exchange Commission’s jurisdiction.” 

The leading media outlet cited comments from former SEC’s legal representatives, with the majority saying that the implosion of cryptocurrency exchange FTX will determine the outcome of the Ripple lawsuit.

Alderoty’s Reaction

Reacting to the article, Alderoty said irrespective of how Bloomberg dissects the lawsuit, the experts all agree that the outcome of the case will affect the future of cryptocurrencies in the United States.

“No matter how you dissect it, the experts agree — the outcome of the Ripple case will likely have a significant impact on crypto’s future in the U.S.,” he said. 

No matter how you dissect it, the experts agree — the outcome of the Ripple case will likely have a significant impact on crypto's future in the US. https://t.co/2IS5OR8O1W

— Stuart Alderoty (@s_alderoty) January 17, 2023

The ongoing Ripple case has captured much attention from the XRP community and other cryptocurrency investors, thus suggesting the significance of the lawsuit in the U.S. crypto industry.

Debate Over Who Should Regulate Crypto

There is an ongoing debate over who should regulate the cryptocurrency industry. With top industry players like Ripple’s CEO Brad Garlinghouse backing the CFTC to emerge as the appropriate regulator for crypto, the SEC, under the leadership of Gary Gensler, is trying to position itself as the cop on the beat for the emerging market.

Carol Goforth, a professor at the University of Arkansas School of Law specializing in fintech regulation, said in the Bloomberg piece that should the SEC win the lawsuit, the regulator would claim jurisdiction over most crypto assets.

However, a win for Ripple could reduce the SEC’s claim over becoming the regulatory watchdog for crypto.

It bears mentioning that the SEC has faced criticism from crypto stakeholders over its regulatory approach in the crypto sector. Industry players, including Alderoty, have accused the SEC of preferring enforcement instead of clarifying rules.

Aside from crypto enthusiasts, Arthur Jakoby, a former SEC attorney, has slammed the SEC for its regulatory approach in the crypto space.

“Instead of engaging in transparent and public rulemaking, with industry comments, the SEC has chosen to mark its digital asset territory via the federal court system,” Jakoby noted.

In response to this criticism, Gensler has maintained that existing financial market rules are clear.

Meanwhile, a decision in the Ripple v SEC lawsuit is expected to be given in the first half of the year, as both the SEC and Ripple are asking Judge Analisa Torres to rule in their favor.