After spending a significant part of his professional legal career crawling up the legal ranks and later offering legal services for traditional financial institutions, Ripple’s lead lawyer, Stuart Alderoty tells it all to Protocol, his exciting two years as a front line lawyer in the biggest legal battle rocking the crypto space.
How Big Is SEC v. Ripple?
On the surface, it’s over $1.3 billion big. Deep down, it has the potential to engulf over 40% of the trillion-dollar crypto market, and it’s all as a result of the confusion set by the previous SEC administration, Alderoty says.
“A person of ordinary intelligence really couldn’t figure out what was on the right side of the SEC interpretation and what was on the wrong side of the SEC interpretation.“
Alderoty believes XRP transferring billions of its pre-mined digital currency to its parent company, Ripple, without the SEC’s notice does not in any way, constitute a violation of SEC’s investor protection and disclosure laws.
If for anything, the government body’s internal laws and regulatory systems for digital assets need to be clearly examined to know where the Howey test applies and where it doesn’t and see what its leaders thought about digital assets five to seven years ago.
For The Glory Of Crypto
Ripple, by virtue of the current lawsuit, bears on its shoulder the burden of defending many other digital currencies with a similar structure or a similar pattern of a start-up.
It is the same reason why the company is seeking to get a deposition for the former SEC director, Joseph Hinman, who it is believed, oversaw the crafting of SEC digital asset laws.
Even though Ripple has seen series of victories delivered by US Judge, Sarah Netburn, there are still hurdles that lie ahead for the coin and until US-SEC admits it lacked the requisite clear and comprehensive regulatory framework that can convict Ripple of alleged wrongdoing, the top-shot crypto lawyer will continue to struggle for more successes at the court.
Coinbase Deserts XRP
Alderoty laments the double standard displayed by Coinbase at the early stages of its legal battle. Coinbase delisted XRP from its platform on the hill of the lawsuit, sending its value to hydrocarbon levels and frustrating all present and potential investors in the US and other European countries.
“This is the regulatory morass we’re in. That regulatory morass, I think, is resulting in kind of bizarre or perverse outcomes.”
Given that the digital asset community is expected to stick together and help shape regulations favorably, Alderoty believes coinbase acted rather distastefully to leave an asset like Dogecoin on its platform but take out XRP.
Respite, for Ripple, has only continued to come from investors in countries outside the US who continue to trade the seventh-largest digital currency despite the US government’s frustrations. Alderoty, like everybody else, wants a fair slice of the US digital asset market and would like to see the country’s regulatory framework become more rational and lucid.
In The Future..
The front line legal wants the SEC, FinCEN, US Treasury, CFTC, and other financial and environmental bodies to get on a roundtable and clear interwoven set of laws that give the digital space a ground to breathe and innovate.
It should be something similar to what former US President Bill Clinton did in the 90s with the advent of the internet, Alderory adds.
Maybe, Gary Gensler —the MIT blockchain professor turned SEC chairman — can help.
Till then Ripple will have to continue to bury its hands back in legal dirt and hope to come out with a gold standard for other digital assets to follow.