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Ripple's General Counsel Reacts to SEC's "Very Dangerous" Legal Theory

Wed, 08/03/2022 - 19:24
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Alex Dovbnya
Stuart Alderoty claims that the SEC is attempting to expand its reach beyond securities
Ripple's General Counsel Reacts to SEC's "Very Dangerous" Legal Theory
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Stuart Alderoty, general counsel of Ripple, took aim at the U.S. Securities and Exchange Commission in a series of recent tweets.

Alderoty claims that SEC keeps relegating its sister regulator, the Commodity Futures Trading Commission (CFTC), to the “kids' table.” He adds that the regulator’s strategy is to attack various projects with its “regulation by enforcement” approach in order to expand its reach beyond the realm of securities.  

In a recent tweet, attorney John Deaton, who attended a recent hearing in the SEC v. LBRY case, said that it was “scary” what the SEC argued. “The SEC attorney basically said something very dangerous,” he said in a follow-up video. According to Deaton, the SEC attorney conceded that some people had acquired LBC tokens for consumption. Nonetheless, the agency rejected the utility argument. Its attorney argued that it didn’t matter what percentage of tokens was acquired for use instead of investment. Hence, any token can be classified as a security even if there was some expectation of profit.

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“I just want you to think about this for a minute because that is so dangerous…It’s just an umbrella that usurps all kinds of asset classes,” he added.

Deaton believes that the definition could even apply to Bitcoin despite the fact that SEC Chair Gary Gensler himself stated that the world’s largest cryptocurrency is a commodity.

Alderoty drew a comparison between crypto and gold in an attempt to dismantle the SEC’s argument. As reported by U.Today, Ripple has also compared XRP tokens to oil and diamonds in the past.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at