Ripple CLO Stuart Alderoty Reveals SEC’s Unfair Conduct in XRP vs. SECOND

In the ongoing legal battle between Ripple and the United States Securities and Exchange Commission (SEC), Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, compared the SEC’s actions to the absurdities depicted in Franz Kafka’s novel, “The Trial.” Alderoty criticizes the SEC for its perceived unfair handling of XRP vs. SEC during the Wells Notice investigation and process, suggesting a broader problem affecting other cryptocurrency companies like Robinhood and Coinbase.

Ripple CLO criticizes inconsistent SEC actions

Ripple has consistently maintained that the SEC’s handling of the matter was marked by inconsistency and unfairness. Ripple CLO’s reference to Kafka’s work is a pointed critique of what Ripple perceives as the regulator’s opaque and arbitrary actions. According to Ripple, this case illustrates the broader challenges facing cryptocurrency companies, which often receive conflicting comments from the SEC. Other companies like Robinhood and Coinbase have also reported similar regulatory hurdles.

The SEC continues to seek substantial sanctions against Ripple, demanding nearly 2 billion dollars to sell XRP to institutional investors. Ripple responded by filing and sealing certain documents, highlighting the potential harm to its business interests if specific financial details were disclosed. The deletions requested by Ripple include sensitive information about profits, revenues, expenses, and discounts at which XRP was sold to institutions. While recognizing the relevance of these discounts, Ripple refuses to disclose the exact financial conditions, citing commercial secrecy.

House opposes SEC’s excessive crypto regulation

Ripple’s motion to seal the documents also aims to protect the identities of third-party financial institutions, customers, and employees. The company argues that disclosing this information could compromise legitimate privacy interests and harm business relationships. XRP’s position is that such disclosures would not only affect its partners but also hinder its ability to operate effectively in the market.

Despite the SEC’s strong demands, XRP maintains that any civil penalty should be capped at $10 million. This stance reflects Ripple’s belief that the SEC’s $2 billion lawsuit is excessively punitive and does not reflect actual circumstances. Ripple’s arguments highlight the broader tensions between regulatory enforcement and business operations within the cryptocurrency industry.

The XRP legal battle has drawn attention to the SEC’s broader regulatory approach. Stuart Alderoty praised bipartisan efforts by the U.S. House of Representatives to limit the SEC’s overreach in regulating cryptocurrencies. Recently, the House voted to overturn the SEC’s decision. Personnel accounting bulletin No. 121 (SAB 121), which requires financial institutions to include customers’ cryptocurrency holdings on their balance sheets.

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