Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has criticized the U.S. Securities and Exchange Commission (SEC) and its Chair, Gary Gensler. The move follows the agency’s recent filing in the Binance lawsuit. The timing of this legal move has sparked debate, as the SEC could soon undergo leadership changes.
Ripple CLO Fumes at SEC & Gary Gensler
In a post on X, Ripple’s Alderoty questioned the rationale behind the SEC’s decision to file an 81-page brief. “Instead of standing down and pausing crypto litigation with new leadership just weeks away, Gensler’s SEC filed an 81-page brief in the Binance case yesterday,” he wrote.
He also pointed out that the filing rehashed “failed arguments,” including the claim that crypto has no inherent value. Furthermore, Alderoty described the argument as “absurd and unsupported.”
Moreover, the filing mentioned the Ripple SEC lawsuit and XRP, which the agency considers a security. However, it is a sign of using repeatedly failed claims as Judge Analisa Torres had already declared that XRP is “not a security” in a July 2023 ruling.
Instead of standing down and pausing crypto litigation with new leadership just weeks away, Gensler’s SEC filed an 81-page brief in the Binance case yesterday, recycling the same failed arguments—including the absurd (and unsupported) claim that crypto has no inherent value.…
— Stuart Alderoty (@s_alderoty) December 5, 2024
The brief in question opposes Binance’s motion to dismiss the SEC’s amended complaint. The SEC has alleged that Binance offered and sold several crypto assets, including BNB, as unregistered securities. Binance had earlier moved to dismiss these allegations, disputing the SEC’s interpretation.
The Ripple CLO’s remarks come as the political landscape surrounding the SEC shifts. Former President Donald Trump has nominated Paul Atkins, a pro-crypto advocate, as the potential next SEC Chair. If confirmed, Atkins could lead a significant shift in the agency’s approach to cryptocurrency regulation.
Also, Ripple’s Alderoty suggested that the SEC should halt its litigation efforts until the leadership transition is finalized. “The Commission could wait for the next administration for guidance on how best to proceed with these lawsuits,” he noted.
Gensler’s Actions Draw Broader Criticism
Alderoty’s criticism is not an isolated instance. John Reed Stark, a former SEC official, also raised concerns about Gensler’s recent moves. Stark alleged that Gensler is taking steps to maintain influence over the SEC’s crypto enforcement agenda, even after his departure.
“Gensler just promoted three crypto-enforcement lawyers in the SEC to senior executive positions,” Stark claimed. He emphasized that these individuals will now oversee critical SEC units, including the trial and crypto divisions. Stark found it unusual that the SEC has not publicly announced these promotions, given the agency’s usual transparency around such appointments.
Stark suggested that Gensler’s strategy aims to extend his influence over the SEC’s actions, even if the leadership changes. He described it as an attempt to “lead from the grave.”
Gensler has already announced his intention to step down whenDonald Trump returns to office, i.e. on January 20, 2025. These developments have led to speculation about the future direction of the SEC and its stance on crypto regulation under new leadership.
