Ripple Reveals Prior SEC Settlement Proposal; Court Rules XRP Not a Security
Summary:
Ripple's General Counsel, Stuart Alderoty, revealed details about the SEC's proposed settlement prior to its 2020 lawsuit. SEC wanted Ripple's XRP declared a security and compliance within a brief timeline. Ripple was accused of conducting an unregistered securities offering, raising over $1.3 billion. However, Ripple refuted the SEC's demand, arguing that the SEC lacked a clear regulatory framework for cryptocurrency. Despite industry criticism, the SEC failed to establish proper industry compliance. Judge Analisa Torres ruled that XRP is not a security in retail transactions, and the SEC has now dropped charges against Ripple's CEO and co-founder.
Ripple's General Counsel, Stuart Alderoty, has revealed details of the proposed settlement by the Securities and Exchange Commission (SEC) prior to the lawsuit launched in December 2020. Reflecting on the third anniversary of this legal proceeding, Alderoty shared the SEC's original proposal: a settlement which would involve a public declaration that XRP is a security, with a brief timeline then provided for market compliance.
On 22nd December 2020, Ripple's co-founder, Christian Larsen, along with CEO, Bradley Garlinghouse, were charged by the SEC with conducting an unregistered securities offering via digital assets, allegedly raising more than $1.3 billion in process. Alderoty's account indicates that in 2020, Ripple was asked by the SEC to publicly announce that XRP was indeed a security, with a short time allowed for the cryptocurrency to become compliant. However, Ripple refuted this demand, adamant in their stance that XRP is not a security and arguing against the SEC's failure to develop a comprehensive regulatory framework for cryptocurrency compliance.
Alderoty further explained that the SEC had not provided lucid regulations in terms of compliance with cryptocurrencies, leading to industry criticism and businesses relocating. Despite this, three years after the XRP lawsuit, the SEC still failed to frame proper industry compliance, choosing instead to take an enforcement-first approach by initiating legal proceedings against major cryptocurrency exchanges such as Coinbase and Binance.
Despite varying opinions from the likes of Clayton, Hinman, Gensler, and others, Alderoty attested that the lawsuit's central objective consistently maintained that XRP is not a security in and of itself.
Numerous US cryptocurrency entities argue that prevailing securities laws are ill-suited for the realm of digital assets; nevertheless, the SEC's progress in establishing a dedicated regulatory framework for cryptocurrencies remains minimal.
Additionally, Judge Analisa Torres challenged the SEC's claim in court that XRP is a security. Within a Summary Judgment in July 2023, Judge Torres determined that XRP is not a security in the context of retail transactions.
As per reports by Cointelegraph, the SEC has now withdrawn the charges it initially brought against CEO Garlinghouse and Larsen. In related news, Crypto Banter's Ran Neuner has described Ripple as 'unacceptable,' while also acknowledging ZachXBT's entry into the Hall of Flame.
Published At
12/23/2023 2:03:32 PM
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