An appeal by the U.S. Securities and Exchange Commission (SEC) against Judge Analisa Torres’ ruling on XRP will affirm the decision, according to Stu Alderoty, the chief legal officer (CLO) of Ripple Labs.
During an interview with TechCrunch’s Chain Reaction, Alderoty said the judge’s decision was right as it was a “faithful application of the law.”
Recall that the SEC hinted at a potential appeal to Judge Torres’ decision about a week after she ruled that XRP constitutes security when sold to institutional clients, not the general public or in secondary markets.
The regulator asked a federal judge to ignore key parts of the XRP ruling in another filing against Terraform Labs and its former CEO, Do Kwon. The SEC requested that the court not follow the verdict on XRP secondary market sales as it was “wrongly decided” and was contemplating other avenues for further review.
Alderoty said Ripple will not be frightened by the SEC’s appeal as the move will not only affirm Judge Torres’ decision but may even amplify it to a greater extent.
The Ripple CLO further said the XRP ruling could significantly impact the SEC’s cases against Binance and Coinbase – two of the world’s largest cryptocurrency exchanges – because the decision clarified that the trading of crypto assets does not constitute investment contracts and, therefore, are not securities.
He believes this could mean that the SEC has no authority over exchange trades, which is vital to the lawsuits against both platforms.
Moreover, the agency could lose the cases if it claimed that crypto tokens are securities in their own right.
Alderoty also believes the battle for crypto regulatory clarity is far from over, as the SEC may not end its regulation by enforcement approach soon. He added that the ruling now underscores the need for a clear rule book for the crypto sector.
“We still need a rational, comprehensive, and understandable regulatory framework for crypto in the U.S. And because of the SEC’s refusal to basically apply the law and trying to pretend that they have jurisdiction when jurisdiction doesn’t otherwise exist, the U.S. has been falling behind the rest of the world,” the Ripple legal chief said.
