The U.S. Securities and Exchange Commission (SEC) is facing a tough time. It all began when a court’s decision about XRP in July 2023 left things hanging in the balance. And then, the Grayscale win added more to the SEC’s woes.
A judge even said the SEC’s denial of Grayscale’s plan was “arbitrary and capricious.” This has raised questions about how the SEC deals with cryptocurrencies.
Ripple’s Chief Legal Officer, Stuart Alderoty, has expressed serious concern over the SEC’s recent string of courtroom losses under the leadership of Gary Gensler. His concerns came against the backdrop of another blow to the Commission in the Fifth Circuit court.
SEC Left With a 30-day Opportunity
The U.S. Court of Appeals for the Fifth Circuit sided with several business groups, including the U.S. Chamber of Commerce, who had filed a lawsuit, asserting that the SEC had failed to consider valuable input during a notice-and-comment period.
Additionally, they argued that the SEC had not substantiated its claims that the rule would benefit the investing public.
On October 31, 2023, the U.S. Court of Appeals said that the SEC acted “arbitrary and capricious” by ignoring petitioners’ comments and failing to conduct a proper cost-benefit analysis. Now, the court is giving the SEC 30 days to prove it did the right thing.
This setback is another blow for the SEC after losing the XRP lawsuit and the Grayscale case, meanwhile, it’s making people wonder about how the SEC is handling the crypto world.
Stuart Alderoty CLO of Ripple, Sounds Troubling Pattern for SEC
Stuart Alderoty, the Chief Legal Officer of Ripple, didn’t hold back when it came to sharing his thoughts on the SEC’s recent legal woes under the leadership of Chair Gary Gensler. He didn’t mince words in characterizing the situation as a “very troubling pattern” where the SEC seems to be drifting away from the principles of the law.
Back on October 25, 2023, Judge Analisa Torres officially issued an order regarding the US SEC’s decision to drop charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen in the Ripple vs. U.S. SEC lawsuit.
Judge Torres has called for a joint scheduling brief from both parties, marking a significant step following the split verdict on July 13, 2023, which favoured Ripple in the case concerning the retail sale of XRP tokens.