Stuart Alderoty, Ripple’s Chief Legal Officer, harshly criticized Securities and Exchange Commission (SEC) Executive Director Gurbir Grewal regarding his comments on compliance efforts within the cryptocurrency industry.
At a recent SEC event, Grewal suggested that the burgeoning cryptocurrency sector is using a variety of tactics, including moving to or registering in other jurisdictions, to circumvent regulatory oversight. He also expressed concerns about the SEC’s regulatory approach and refuted claims that it exceeded and overreached its regulatory obligations.
But Alderoty highlighted the inconsistencies in Grewal’s comments, pointing to instances where the SEC potentially overstepped its bounds and abused its authority. He specifically mentioned DebtBox’s sanctions for “serious abuse of power,” Judge Ripple’s criticism of his lack of “loyalty to the law,” and his “arbitrary and capricious” ruling in the Grayscale case.
Moreover, Alderoty criticized the SEC’s erratic application of the Howey test, the standard used to determine whether a particular transaction qualifies as an investment contract. He noted that the SEC’s guidance on the Howey test, which still exists on its website, has been fluctuating arbitrarily, causing confusion and inconsistency within the industry.
According to Alderoty, the SEC must address these concerns to restore credibility and trust. He urged regulators to acknowledge and redress the systemic damage caused by their approach to cryptocurrency regulation, emphasizing the need for greater transparency and accountability.
In conclusion, Alderoty emphasized that the SEC must face these truths and adopt a more responsible and balanced regulatory stance if it truly aims to repair the systemic damage caused during what he called the “misguided war on cryptocurrencies.”
Featured Image: Freepik
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