“We put everything on the line. Few thought we would win. But we did. In the process we exposed the SEC for the hypocritical tyrant it is and the industry in the U.S. lived to fight another day. Onward to 2024.”
Stuart Alderoty, Ripple Labs’ Chief Legal Officer, didn’t mince words on X as he vented frustration over the SEC’s lawsuit saga. He said that three years ago, the SEC pitched a settlement, proposing to brand XRP as a security and giving the market a mere window to “comply.” Ripple flatly refused, standing firm on two points: XRP is not a security, and the SEC lacked a coherent crypto compliance framework.
Alderoty made it clear that beyond any current attempts to spin the narrative by figures like Clayton, Hinman, or Gensler, the core battle was always about proving that XRP isn’t inherently a security. Ripple gambled everything, and against the odds, emerged victorious.
In Alderoty’s words, they exposed the SEC as a hypocritical tyrant, calling out the regulator for the toll the legal battle took on time and money. Looking forward to 2024, Alderoty affirmed a defiant spirit, signaling Ripple’s determination to continue the fight in the ever-evolving U.S. crypto landscape.
Before the SEC sued Ripple, Chris and Brad (3 yrs ago today) they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to “come into compliance.” We said no because: (1) XRP is not a…
— Stuart Alderoty (@s_alderoty) December 22, 2023
“Before the SEC sued Ripple, Chris and Brad (3 yrs ago today) they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to “come into compliance.” We said no because: (1) XRP is not a security; and (2) the SEC never built a framework for crypto compliance. No matter the spin that Clayton, Hinman, Gensler or anyone else puts on this case now, it was always about one thing – – proving that XRP is not, in and of itself, a security. We put everything on the line. Few thought we would win. But we did. In the process we exposed the SEC for the hypocritical tyrant it is and the industry in the U.S. lived to fight another day. Onward to 2024.”
U.S. court ruled XRP not a security for retail buyers
Alderoty’s words on X came in months after the landmark decision, on July 13, with U.S. District Judge Analisa Torres ruling that Ripple Labs Inc. did not violate federal securities law by selling its XRP token on public exchanges. This victory marked the first for a cryptocurrency company facing a case brought by the U.S. Securities and Exchange Commission (SEC). While this ruling is specific to the case, it is expected to influence other crypto firms contesting SEC jurisdiction.
Judge Torres’ decision acknowledged a partial victory for the SEC, affirming that Ripple violated federal securities law by selling XRP directly to sophisticated investors.
The SEC’s case against Ripple centered on allegations of a $1.3 billion unregistered securities offering through XRP sales. The judge’s determination hinged on the classification of XRP sales on public exchanges as not constituting securities offerings, as buyers did not have a reasonable expectation of profit tied to Ripple’s efforts. However, the SEC secured a partial win regarding Ripple’s sales to sophisticated buyers.
