Ripple Reflects on Year Since Partial Victory Over SEC

Last summer, the Southern District Court of New York ruled in favor of Ripple Labs in its ongoing case against the SEC, which began in 2020. A year later, the company’s chief legal officer, Stuart Alderoty, discussed the ruling’s impact on the industry.

Some reflections as we approach the one year anniversary of Judge Torres’ Summary Judgment decision in the SEC v Ripple lawsuit.

First and foremost – it was a watershed moment to find as a matter of law, a token – in this case, XRP – in and of itself, is not a security.

This… https://t.co/0gh0EYhFZO

— Stuart Alderoty (@s_alderoty) July 12, 2024

“First and foremost, it was a watershed moment, clarifying that from a legal standpoint, a token — in this case, XRP — is not a security in itself,” he stated.

On July 13, 2023, Judge Analisa Torres concluded that sales and other distributions of XRP do not constitute an offer and sale of investment contracts. However, Ripple’s victory was incomplete — according to the court’s decision, institutional purchases of coins exceeding $700 million violated U.S. laws.

Alderoty believes this decision set a precedent for many other companies (most recently for Binance). Thus, courts “recognized the SEC’s gross abuses and lack of commitment to the law under Chairman Gary Gensler,” the lawyer opined.

“Courts have provided much-needed scrutiny of the Commission’s behavior, but clarifying each token through endless litigation is unacceptable. Policymakers on both sides are increasingly frustrated by the lack of legislative progress in the cryptocurrency sphere, as the U.S. continues to lag behind the rest of the world,” added the Ripple executive.

He emphasized that the company’s case against the regulator is not yet fully resolved. However, Alderoty expressed confidence in maintaining the decision regarding XRP’s status.

“Do not be distracted by the SEC’s ongoing efforts to entangle Ripple and the rest of the industry in litigation — the agency’s runway is coming to an end. Ripple and the entire industry will continue to grow stronger long after Gensler’s departure,” the lawyer concluded.

In March, the SEC requested the court impose a $2 billion penalty on Ripple Labs, including fines. Later, the company sought to reduce the payment to $10 million.

Earlier in February, Ripple investors filed an updated class action lawsuit against the company, alleging violations of securities laws.