Stuart Alderoty, the legal chief at Ripple, stated in a post that the SEC asked the company to publicly recognise XRP as a security asset in 2020 and provided a short window for cryptocurrency compliance.
Stuart Alderoty, the head of Ripple’s legal department, revealed the details of the Securities Exchange Commission’s (SEC) proposed settlement before the agency filed the lawsuit in December 2020.
As the case approaches its third anniversary, Alderoty referred to the terms of the settlement that the Commission had suggested before filing the lawsuit. He clarified that the SEC offered a settlement three years ago today, prior to suing Ripple, Chris, and Brad. The settlement called for openly designating XRP as a security and giving the market a short window of time to “come into compliance.”
The SEC charged Christian Larsen, a co-founder of Ripple, and Bradley Garlinghouse, the company’s CEO, on December 22, 2020, with running an unregistered digital asset securities offering that raised more than $1.3 billion.
Alderoty’s post states that the SEC asked Ripple to publicly recognise XRP as a security asset in 2020 and granted a short period of time for crypto compliance. SEC’s demand was met with resistance by Ripple, who insisted that XRP is not a security. They also claimed that the SEC had not created a framework of regulations for compliance with cryptocurrency.
Alderoty explained that there were no explicit regulations for crypto compliance from the SEC. Three years after the XRP lawsuit, the U.S. regulatory body failed to establish appropriate industry compliance, despite criticism from the industry and company relocations.
Rather, it adopted a first-to-execution enforcement strategy, filing lawsuits against significant cryptocurrency exchanges like Binance and Coinbase. Even though Clayton, Hinman, Gensler, and other experts had different points of view, Alderoty stressed that the main goal of the case was always to show that XRP is not a security in and of itself.
Notwithstanding the SEC’s lack of progress in creating a distinct regulatory framework for cryptocurrencies, American cryptocurrency enterprises have argued that the country’s securities laws are inapplicable to digital assets.
But, in court, Judge Analisa Torres disproved the SEC’s claim that XRP qualifies as a security. A summary judgement issued in July 2023 by Judge Analisa Torres declared that XRP is not regarded as a security in transactions involving retail customers. SEC charges against CEO Garlinghouse and Larsenwere reportedly dropped.