The legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC) continues to await a decision after both parties filed final reports about a month ago. The latest development in the lawsuit was the intervention of Forbes journalist Dr. Roslyn Layton, who filed a motion to intervene to ask the court for access to documents from Hinman’s speech.
However, Ripple’s chief legal officer (CLO), Stuart Alderoty, has repeatedly pointed out the SEC’s misconduct in recent weeks. Two weeks ago, he wrote that SEC Chairman Gary Gensler is a political liability for failing to establish proper regulation for the more than 40 million Americans who own cryptocurrencies.
Ripple CLO Demands Gensler Withdrawal
In his latest tweet, Alderoty calls attention to some serious misconduct by Gary Gensler that may yet be his undoing. The Wavy CLO writes:
PSA Crypto Lawyer: Chairman Gensler has again proclaimed that all cryptocurrencies except BTC are unregistered securities. You must now abstain from voting on any enforcement case that raises that issue, as you have prejudged the outcome. Antoniu v. SEC (8th Cir. 1989).
Alderoty’s tweet alludes to an interview by Gensler in New York Magazine in which he stated that “everything that isn’t Bitcoin” is a security. However, by making this unequivocal and clear statement, Gensler may have erred, as Alderoty points out, citing Antoniu v. SEQ.
In that case, the defendant SEC barred a stockbroker from working at a firm for violating federal securities laws. The SEC initiated proceedings to permanently bar the stockbroker from all employment in the securities field.
However, an SEC commissioner made a monumental mistake, the court later ruled. While the proceedings were pending, the commissioner called the ban permanent.
The court concluded that the commissioner’s comments regarding the permanent ban on the stockbroker’s employment while the case was pending showed that the commissioner had prejudged the matter. The Commissioner’s continued participation in the debarment proceeding violated due process.
With his recent statement, Gary Gensler has disqualified himself from participating in any vote on a crypto-related securities case. As Alderoty explains, Gensler must now abstain from voting on any execution case since he has prejudged the outcome.
The SEC faces another battlefield
Meanwhile, the SEC also faces a new battleground to fight with a lawyer from the XRP community. Fred Rispoli of Hodl Law sued the SEC two months ago and asked the court to declare that Ether and the Ethereum network are not securities.
Surprisingly, the SEC has filed a motion to dismiss the lawsuit. In its motion, the SEC makes this impressive statement:
Hodl Law’s own allegations make it clear that the SEC has not reached a final decision on the Ethereum or Ether network.
Once again, the SEC and Gensler contradict each other. The first hearing day in the case is scheduled for March 13.
At press time, XRP was trading at $0.3741, down 0.3% over the past 24 hours.
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