Cryptocurrencies

Ripple Chief Legal Officer: “SEC Rules Are Bullshit”


The crypto world has been under the magnifying glass of the SEC (Securities and Exchange Commission) for years. The crypto sector has been waiting for years for clarity when it comes to regulation of digital assets. Instead of looking at a growing market, the SEC seems to opt for an ad hok approach and wants to tackle individual cases, to the dissatisfaction of crypto entrepreneurs. Ripple’s CLO (Chief Legal Officer), Stuart Alderoty, is done with it. He calls the SEC’s current approach “nonsense” and demands clarity.

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A confusing mess

The core of Alderoty’s criticism is based on a speech by former SEC director William Hinman in 2018. In this speech, Hinman suggested that cryptocurrencies can “magically” change from a security to a non-security. According to Alderoty, this statement is a source of confusion in the market and leads to uncertainty for companies that work with digital assets.

Case-by-case analysis

Recently, courts in the United States have made clear that they do not accept the SEC’s position that all sales of digital assets should be considered securities. In the lawsuits against Binance and Ripple, the judge emphasized that each transaction must be viewed individually.

The Howey Test: The Key to Clarity

Alderoty emphasizes that the Howey Test, which determines whether an asset is a security based on the characteristics of the investment contract, is the key to clarity. The judge in the Binance case takes the same view, stating that it is “a departure from the Howey test” to claim that an asset is a security in itself, without looking at the specific circumstances of the transaction.

What will be the future of digital assets?

Alderoty’s statements and recent lawsuits raise questions about the future of regulation for digital assets. Will the SEC revise their approach and issue clearer guidelines for the crypto community? Or will we continue to live in a world of uncertainty and confusion? Time will tell, but one thing is certain: the battle for clarity is far from over.



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