Stuart Alderoty, the Chief Legal Officer (CLO) at Ripple Labs, recently revealed on the X social media platform (formerly known as Twitter) that the U.S. Securities and Exchange Commission (SEC) had proposed an early settlement to the fintech firm.
This revelation comes three years after Jay Clayton, then Chairman of the SEC, initiated legal proceedings against Ripple and its top executives, including co-founder Chris Larsen and CEO Brad Garlinghouse.
Ripple Declines SEC’s Early Settlement Offer
Ripple’s Chief Legal Officer Stuart Alderoty recently shared details about an early settlement offer from the SEC in 2020. The settlement proposal outlined by the SEC suggested that they would publicly declare XRP as a security and provide the market a brief period to align with compliance requirements.
Ripple’s firm stance led to the rejection of this offer. Alderoty explained Ripple’s decision, emphasizing two critical points: firstly, Ripple’s unwavering position that XRP is not a security, and secondly, highlighting the SEC’s lack of a comprehensive regulatory framework for cryptocurrencies.
Ripple’s Legal Battle: Defending XRP’s Status
The CLO reflected on the company’s prolonged legal battle with the SEC, emphasizing their primary objective: to establish that XRP is not a security. The intense three-year court struggle, culminating in recent victories for Ripple, was driven by this fundamental assertion.
Alderoty acknowledged the high stakes involved, admitting that few believed Ripple could triumph over the SEC. However, through the course of this legal saga, Ripple not only contended with the SEC’s charges but also aimed to reveal what Alderoty describes as the SEC’s hypocrisy. In doing so, he asserts, Ripple played a pivotal role in ensuring that the U.S. cryptocurrency industry continued its fight for clarity and fair regulation.
Ripple’s Legal Milestones and Future Outlook
During the summer, Ripple experienced a significant legal triumph when Federal Judge Analisa Torres ruled that the sales of XRP in the secondary market did not constitute security transactions. This ruling marked a major victory for Ripple, resulting in a temporary surge of XRP’s value to a high of $0.71.
Following this, in the fall, Ripple secured another win as the SEC voluntarily dropped the personal charges against Ripple executives Chris Larsen and Brad Garlinghouse. This series of legal successes has been pivotal for Ripple and the broader cryptocurrency industry.
Looking ahead, Alderoty anticipates the final resolution of the case to occur next year. However, he expresses concern about the SEC’s stringent regulatory stance, fearing its potential impact on other leading entities in the cryptocurrency sector.