Ripple exec calls out SEC’s ‘gross abuse of power’ – What next for XRP?

• Ripple’s CLO disputed SEC’s integrity citing past criticisms and sanctions for abuse of power.
• SEC’s inconsistent crypto guidance was highlighted, which confuses market participants.

Amidst ongoing legal tensions between Ripple [XRP] and the US Securities and Exchange Commission (SEC), the cryptocurrency market faces challenges regarding the classification of crypto assets in financial markets.

Remarking on the same, during the “SEC Speaks” event, SEC Director Gurbir Grewal addressed the agency’s approach to regulating the cryptocurrency industry. He highlighted concerns about noncompliance and regulatory enforcement tactics.

In response to comments made by Grewal, Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, noted,

“On the substance, he cites one portion of the Ripple ruling but ignores that the SEC lost or gave up on most of its claims in the case, including the Court’s rejection of the SEC’s assertion that XRP was in and of itself a security.” 

Ripple’s CLO challenges SEC’s integrity 

Alderoty challenged SEC’s integrity, citing past legal cases, including the Debt Box lawsuit in which Judge Robert Shelby denied SEC’s motion to dismiss charges.

Additionally, the Office of Inspector General is investigating crypto conflicts of interest within the SEC, potentially prompting lawmaker action.

Remarking on the same, Alderoty noted, 

“Dir. Grewal says the crypto enforcement unit acts with integrity but ignores the DebtBox sanctions for “gross abuse of power,” the Ripple Judge’s admonishment for lack of “faithful allegiance to the law,” and the “arbitrary and capricious” finding in the Grayscale case.” 

Additionally, the CLO criticized Grewal for cherry-picking parts of the Ripple ruling where the SEC prevailed, while ignoring the court’s decision favoring XRP.

Echoing similar sentiments, @JWVerret highlighted, 

“The SEC typically collects 11% of unregistered sales claims, but in Ripple case they want 300%. This is what abuse of power looks like.” 

XRP’s positive roadmap ahead 

In conclusion, the specific criticisms directed at the SEC reflect growing frustration within the US cryptocurrency community. With the absence of a comprehensive regulatory framework for crypto in the US, the SEC often resorts to regulation through enforcement.

Moreover, the ambiguity surrounding regulatory guidelines beyond the Howey Test provides the SEC with leeway to initiate legal proceedings against cryptocurrency firms.

This dynamic underscores the pressing need for clearer regulatory guidelines to foster a more conducive environment for crypto innovation and compliance within the United States.

Amidst these legal tensions, XRP too experienced a downward trend this week reaching its lowest point for the month at $0.5623.