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SEC Grapples With Judicial Criticism in Ripple Case: Inconsistencies Exposed

2 mins
Updated by Bary Rahma
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In Brief

  • Ripple's CLO Stuart Alderoty highlighted various courts' criticisms of the SEC regarding its handling of lawsuits against crypto.
  • Courts rebuked the SEC for inconsistencies and failure to act in good faith, prompting accusations of false representations.
  • A recent closed-door SEC meeting has fueled speculations that the regulator was considering settling its case against Ripple.
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Ripple’s Chief Legal Officer, Stuart Alderoty, has highlighted concerning trends in the US Securities and Exchange Commission’s (SEC) approach toward defending actions taken against cryptocurrency firms.

Alderoty emphasized instances where different courts have criticized the regulatory body’s actions.

Court Finds Inconsistencies in SEC vs. Ripple Lawsuit

In the SEC case against Ripple, the court rebuked the financial watchdog for what it deemed as hypocritical behavior. The court found inconsistencies in the SEC’s arguments and criticized the commission for not adhering faithfully to the law.

“The SEC is anything but infallible; it is bloated, broken, and beleaguered. Don’t be intimidated when they come knocking,” Alderoty said.

Read more: Everything You Need To Know About Ripple vs SEC

Alderoty cited another instance involving the crypto exchange Coinbase. According to him, the court agreed that the SEC had failed to respond in good faith to Coinbase’s petition for crypto rulemaking.

Another court described the SEC’s reluctance to approve a spot Bitcoin exchange-traded fund (ETF) as “arbitrary and capricious.” In this case, Grayscale sued the SEC for failing to approve its request to convert its Bitcoin Trust into a Bitcoin ETF.

More recently, a court questioned why the regulator should not be sanctioned for making “false and misleading representations” in its case against Debt Box.

Pro-crypto lawyer Danielle Bates said the cases show that the courts have been calling out the SEC for lying.

“Anyone who is paying attention can see it. SEC has been acting in bad faith and taking advantage of the fact that our government is in a stalemate and has done nothing meaningful in a while,” Bates said.

Closed Doors Meeting Fuel Speculations About XRP

The SEC’s ongoing legal clash with Ripple persists. The regulator recently had a closed-door session where high-ranking officials met to address ongoing legal disputes.

While closed meetings within the SEC are common, the agenda highlighted settlement discussions. It prompted speculation that the Ripple case was a focal point in the discussions.

Read more: How To Buy XRP and Everything You Need To Know

It should be noted, however, that the official announcement from the regulator does not explicitly mention Ripple or XRP. Still, some members of the XRP community speculate the outcome of the meeting might lead to a settlement.

Top crypto platforms in the US | February 2024

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.
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