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Ripple's Top Lawyer Questions Validity of SEC's Stoner Cats Settlement

Thu, 09/14/2023 - 05:33
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Alex Dovbnya
The enforcement comes amid a year of increasing SEC action against crypto projects, extending from founders and exchanges to now NFT initiatives
Ripple's Top Lawyer Questions Validity of SEC's Stoner Cats Settlement
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Stuart Alderoty, Ripple's top lawyer, and David "JoelKatz" Schwartz, Ripple's CTO, have voiced skepticism over the U.S. Securities and Exchange Commission's (SEC) recent settlement with Stoner Cats 2 LLC. 

The SEC has accused Stoner Cats of conducting an offering of non-fungible tokens (NFTs) without proper registration. The funds raised were purportedly intended for the production of an animated web series.

Ripple's top brass takes aim at the SEC   

Stuart Alderoty took to Twitter to question the binding nature of the SEC's recent settlement with Stoner Cats, describing such a resolution as "binding on no one" and potentially just a "PR stunt." He argued that when seriously challenged in court, the SEC often loses its cases. 

Similarly, David Schwartz chimed in, noting that settling with the SEC for a few million dollars now may only lead to a pyrrhic victory later, costing double-digit millions. 

Ripple Lawyer Claims SEC Theories Can Be Challenged

His statement implies that such settlements shouldn't necessarily be seen as a win for any party involved.

Cats out of the bag

Stoner Cats 2 LLC quickly sold thousands of NFTs at a significant price each, accumulating a substantial sum of money. 

Actress Mila Kunis, along with other high-profile figures like Ashton Kutcher and Ethereum founder Vitalik Buterin, were involved in the controversial project. 

The SEC contends that buyers were led to believe their NFTs could appreciate in value, thus qualifying them as securities. The NFT project has agreed to fork out a $1 million fine.

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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