Ripple CLO Stuart Alderoty suggests that SEC commissioner Hester Peirce needs to speak out louder and sooner when injustice prevails in non-fraud cases.
Stuart Alderoty, the chief legal officer (CLO) at Ripple Labs, has reacted to a recent dissenting opinion issued by SEC commissioner Hester Peirce regarding the regulator’s enforcement actions against LBRY, a blockchain-based content-sharing platform.
Peirce Condemns SEC Enforcement Action Against LBRY
In a statement issued yesterday, Peirce disclosed that she has been unsettled by the SEC’s enforcement actions against LBRY, which was introduced in March 2021.
Notably, a federal judge ruled in November 2022 that LBRY violated the law by selling unregistered securities in the form of LBRY Credit (LBC). Although LBRY appealed the decision earlier this year, the blockchain company voluntarily withdrew the case, citing heavy debts due to high legal costs. The company also announced that it will wind down and its assets placed in receivership to settle debts.
Commenting on the development, Peirce noted that the demise of LBRY illustrates the consequences of the SEC’s misguided enforcement actions.
She described the case as puzzling, adding that both the SEC and the court did not indicate that LBRY committed any fraud.
“Why go after a company that sold a token for a functioning blockchain with an established use when we could have pursued plenty of other projects that were outright frauds and did not attempt to comply with the securities laws?” she quizzed.
To curtail a future recurrence, Peirce called for suggestions on how the SEC can right its course on crypto innovation.
Ripple CLO Gives Suggestions
Reacting, Alderoty expressed gratitude to the commissioner for publicly condemning the SEC’s enforcement actions against LBRY. In response to her request, the Ripple CLO suggested that Peirce should learn to speak out louder and sooner whenever injustice prevails in non-fraud cases, like the LBRY lawsuit.
Alderoty made the suggestion after Peirce stated that she did not publicly express her concerns about the LBRY matter when the case was still in litigation.
Furthermore, Alderoty suggested that Peirce could also file an amicus brief in these non-fraud cases.
Thank you Commissioner. When you see injustices like this continue in non-fraud cases (while consumers wait for recourse from actual frauds) perhaps it’s time to let ordinary rules of protocol go by the wayside and speak out louder and sooner? Perhaps even with an amicus brief?
— Stuart Alderoty (@s_alderoty) October 27, 2023
Deaton Reacts
Interestingly, Attorney John Deaton supported Alderoty’s opinion, emphasizing that Peirce needs to go the extra mile and file an amicus brief in these cases.
“As you know, 75 thousand individual holders spoke up to have their voices heard in court. I think it’s time someone from the inside also spoke out – in court,” Deaton added.
? Dissents and open letters of criticism are great and appreciated. Certainly, better than nothing. But maybe it is time to get off the sidelines and take that extra step and file an amicus brief. As you know, 75 thousand individual holders spoke up to have their voices heard in…
— John E Deaton (@JohnEDeaton1) October 27, 2023
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