Ripple CLO takes to X platform to react to Stoner Cats 2 decision to settle SEC charges.
Ripple’s Chief Legal Officer (CLO) Stuart Alderoty has commented on the SEC’s recent charges against the company behind the “Stoner Cats” animated series NFTs, Stoner Cats 2 LLC (SC2).
Stoner Cats Settles With SEC
In an announcement yesterday, the SEC said it charged SC2 with conducting an unregistered crypto-asset securities offering in the form of non-fungible tokens (NFTs).
The SEC stated that the company raised $8.2M in July 2021 by selling 10,320 NFTs for about $800 apiece. Notably, SC2 agreed to settle without admitting or denying the charges leveled by the SEC.
It also agreed to a cease-and-desist order and to destroy the remaining NFTs in its possession. Furthermore, the announcement read that the company will pay a civil penalty of $1 million.
Ripple CLO Reacts
Reacting, Alderoty said a “cynic” would describe the SEC’s recent announcement as a PR stunt.
Meanwhile, Alderoty said while he does not know all the details of the SC2 case, he still thinks settling charges to “avoid a crushing SEC process without ‘admitting or denying’ anything is binding on no one.”
In addition, Alderoty asserted that the SEC will continue to lose when it is “seriously challenged in court.”
Notably, popular crypto advocate and lawyer James K. Filan also reposted Alderoty’s comment on the matter.
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) September 14, 2023
Alderoty has always criticized the SEC’s regulatory policies for crypto. Like many enthusiasts, Alderoty’s criticism is focused on seeking clear rules for the industry.
However, he and many others think the commission prefers to regulate the crypto sector using enforcement instead of sticking with the law.
SEC Loses to Ripple & Grayscale
Meanwhile, several crypto companies, including Kraken, have opted to settle with the SEC rather than engage the regulator in a legal battle that could last more than a year.
Interestingly, some companies, including Ripple, LBRY, and Grayscale, have challenged the SEC in court. Although LBRY lost its case against the SEC, Ripple and Grayscale received positive judgments in their cases.
Last month, a court ruled in favor of Grayscale Investments in its lawsuit against the SEC. The court ordered the regulator to review its decision to reject the company’s application to convert its over-the-counter Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
As reported earlier, Ripple secured a partial victory in a case against the SEC. A federal court ruled that the company’s programmatic sales of XRP and other distributions did not violate securities laws.
However, the court found that Ripple’s direct past sales of XRP to institutional investors were investment contracts.
Meanwhile, the SEC is seeking to certify an interlocutory appeal to challenge the decision on Ripple’s programmatic sales of XRP and other distributions.
The parties have filed the necessary motions and are awaiting the court’s decision, which could come at any time.