XRP Lawsuit: Ripple Legal Chief Reveals US SEC Settlement Offer
Ripple legal chief officer Stuart Alderoty revealed the settlement offer from the US Securities and Exchanges Commission (SEC) prior to the December 2020 lawsuit the agency filed.
Also Read: US SEC Reportedly Held Calls with Spot Bitcoin ETF Filers
XRP As A Security
On December 22, 2020, the SEC charged Ripple, its co-founder Christian Larsen and chief executive officer Bradley Garlinghouse with raising more than $1.3 billion through an unregistered, ongoing digital asset securities offering. Marking the completion of three years since the lawsuit was filed, Alderoty recalled the terms of a settlement offer the Commission offered prior to filing the case. He said,
“Before the SEC sued Ripple, Chris and Brad (3 years 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.””
Interestingly, the SEC wanted Ripple to agree and publicly announce that XRP was a security asset, along with providing a small window of opportunity for crypto compliance to become compliant. While the crypto businesses in the United States have long argued that the existing securities laws are not suited for the nature of crypto assets, the SEC showed little efforts towards bringing a crypto-specific regulatory framework.
On the other side, the SEC’s settlement condition for XRP being a security proved to be wrong before the court, with judge Analisa Torres ruling in the July 2023 Summary Judgment that XRP was indeed not a security when it comes to retail buying. Earlier, CoinGape reported that the SEC dropped charges levied against CEO Garlinghouse and Larsen.
Ripple Legal Chief: SEC Never Built Crypto Compliance
ALderoty explained that the SEC never came up with guidelines for crypto compliance. Amid heavy criticism and companies moving offshore, the US markets regulator failed to build compliance for the industry three years after filing the XRP lawsuit. Instead, the agency took the enforcement-first approach, which involved legal attacks against top crypto exchanges Coinbase and Binance.
Also Read: Ripple CEO Calls Gary Gensler ‘Political Liability’ Over Call For Crypto Compliance
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