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- SEC’s Director Gurbir Grewal claimed the SEC acts with integrity in crypto regulation.
- Ripple’s CLO highlighted the irony of the claim with instances when courts have rebuked the SEC for failing to act in good faith.
- One such incident occurred when the SEC was sanctioned for gross abuse of power in its lawsuit against DEBT Box.
Ripple’s Chief Legal Officer Stuart Alderoty has reacted to claims by U.S. SEC Director Gurbir Grewal regarding the crypto industry’s purported noncompliance. On Wednesday, Grewal denounced the crypto industry during a segment of the “SEC Speaks” event sponsored by the Practicing Law Institute.
He addressed the agency’s longstanding criticism, including claims that the SEC engages in regulation through enforcement. Grewal criticized the crypto industry’s alleged noncompliance as creative attempts to avoid “clear” rules.
In reaction, Ripple’s CLO Stuart Alderoty criticized the SEC’s director for claiming that the regulatory agency acts with integrity. Alderoty highlighted the irony of the claims by referencing several legal events where federal courts have rebuked the SEC for failing to act in good faith.
One such incident occurred when the SEC was sanctioned for gross abuse of power in its lawsuit against DEBT Box.
Dir. Grewal says the crypto enforcement unit acts with integrity, but ignores the DebtBox sanctions for “gross abuse of power,” the Ripple Judge’s admonishment for lack of “faithful allegiance to the law,” and the “arbitrary and capricious” finding in the Grayscale case. https://t.co/rZnaumdBOd— Stuart Alderoty (@s_alderoty) April 3, 2024
Furthermore, Alderoty cited an instance when a district judge admonished the agency for lacking faithful allegiance to the law in the Ripple lawsuit. Additionally, he recounted when the court declared that the SEC acted arbitrarily and capriciously in the lawsuit against Grayscale Investments.
Moreover, Alderoty criticized Grewal for selectively citing only a portion of the Ripple ruling, where the SEC won, while disregarding the court’s ruling in favor of XRP.
In response to Grewal’s claim that the SEC has offered guidance to the crypto industry, Alderoty commented that the purported guidance inconsistently “adds and subtracts” factors within the Howey test. He emphasized that the inconsistencies resulted in what the agency’s former General Counsel described as “greater confusion.”
Ultimately, the Ripple lawyer advised that if the Agency aims to rectify the institutional damage inflicted on itself and the industry over the past years, it must step down from its pedestal and acknowledge these truths.
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