Ripple CLO Stuart Alderoty has taken to the X (formerly Twitter) platform to reveal the settlement offer made by the SEC before it officially filed its lawsuit against the blockchain-powered payment company.
According to Alderoty, part of the SEC’s settlement offer before the lawsuit was officially filed required the regulator to announce that XRP is a security. In addition, the SEC also offered a small window for the market to “come into compliance” with existing securities laws.
Notably, Alderoty disclosed that Ripple rejected the settlement offer because it was confident that XRP was not a security and that there was no established framework for crypto compliance at the time.
Before the SEC sued Ripple, Chris and Brad (3 yrs ago today) they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to “come into compliance.” We said no because: (1) XRP is not a…
— Stuart Alderoty (@s_alderoty) December 22, 2023
With Ripple rejecting the offer, the regulator officially charged Ripple with violating securities law on December 22, 2020.
SEC Vs Ripple Case Now 3 Years Old
The SEC alleged that Ripple and two of its execs offered and sold XRP as an unregistered security. It has been three years since the SEC officially sued Ripple.
However, several developments have emerged in the legal battle, including the highly-anticipated summary judgment released on July 13. As reported earlier, U.S. District Judge Analisa Torres ruled that XRP is not, in and of itself, a security.
“No matter the spin that Clayton, Hinman, Gensler or anyone else puts on this case now, it was always about one thing – – proving that XRP is not, in and of itself, a security,” Alderoty said.
In addition, the prominent legal expert said Ripple put everything on the line and engaged the SEC in an intense legal tussle. He stressed that Ripple won the lawsuit even though only a few believed the company would succeed.
Judge Highlights SEC Hypocrisy
Furthermore, Alderoty noted that Ripple successfully exposed the SEC’s hypocrisy and tyranny during the lawsuit. Last year, Magistrate Sarah Netburn, one of the judges presiding over the case, pointed out the SEC’s hypocrisy and inconsistent arguments.
The judge bashed the regulator for “adopting its litigation position to further its desired goal and not out of faithful allegiance to the law.”
Potential Next Outcome
It is unclear whether the Ripple lawsuit will end in a settlement. The securities regulator has yet to publicly make any settlement offer to put an end to the multi-year legal tussle.
The lawsuit is currently in the remedies stage, as the court seeks to determine the appropriate penalty Ripple could pay for violating the law. Once the remedies phase is concluded, the court will issue its final judgment.
After the final judgment is released, the SEC would decide whether to appeal the summary judgment decision at the Second Circuit or agree to settle with Ripple.
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