Ripple’s chief legal officer Stuart Alderoty has publicly criticized the U.S. Securities and Exchange Commission (SEC) for its use of the phrase “crypto-asset security.”
In a post published on his official x account, the lawyer argued that the term is an invented concept that has no legitimate basis.
Lawyer, Court, Call for Commission for Use of Phrase
Alderoty further accused the financial watchdog of using words to mislead judges and the public in its legal actions against the cryptocurrency industry.
“The term ‘crypto asset security’ is not found in any statute; it is a made-up term with no legal basis,” the lawyer said on social media on Sept. 2. x.com/s_alderoty/status/1830644070638850285″ target=”_blank” rel=”noopener” data-wpel-link=”external”>mail“The SEC must stop trying to deceive judges by using it.”
His comments came after the regulator, in an Aug. 30 filing, warned that it could challenge any plans by defunct cryptocurrency exchange FTX to use stablecoins to pay creditors. It claimed that the platform’s portfolio contains “cryptographic asset securities,” a term Ripple’s adviser said lacks a legal definition.
Alderoty’s rebuke is not the first time the agency’s use of the controversial phrase has been questioned. Recently, a California court expressed similar sentiments in a case the Commission brought against cryptocurrency exchange Kraken. On that occasion, the court expressed concern, describing the term as “unclear at best and confusing at worst.”
Highlighting the SEC's inconsistencies
The lawyer has repeatedly pointed out inconsistencies in the regulator's stance on the status of various digital assets.
Recently, it issued a Wells Notice to nft marketplace OpenSea, signaling a potential lawsuit on the grounds that some nfts sold on the platform could be considered unregistered securities. Alderoty challenged the agency, x.com/s_alderoty/status/1829138866705690990″ target=”_blank” rel=”noopener” data-wpel-link=”external”>declaring which had previously decided not to take enforcement action in a case eerily similar to that of OpenSea.
According to him, 48 years ago, the Commission ruled that art galleries, even when promoting and selling to buyers with investment motives, did not need to register with it. He argued that this precedent should be extended to digital assets, where the intention is to foster innovation and creativity rather than adhere to outdated regulatory frameworks.
The SEC’s actions have sparked a broader debate within the cryptocurrency community about the need for clear and consistent regulations. Many industry leaders, including those at Ripple, argue that the financial watchdog’s approach, which often relies on enforcement rather than clear guidelines, creates uncertainty and stifles innovation.
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive an exclusive welcome offer of $600 on Binance (full details).
2024 LIMITED OFFER on BYDFi Exchange: Welcome reward up to $2,888, use this link to register and open a 100 USDT-M position for free!
<!– ai CONTENT END 1 –>
