Ripple CLO Criticizes SEC Chair’s Statements on Tokens Being Securities
Ripple Chief Legal Officer (CLO) Stuart Alderoty recently expressed his dissatisfaction with the statements made by the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler regarding cryptocurrencies during a congressional hearing. Alderoty disagreed with Gensler’s repeated assertions that tokens are considered securities. He questioned whether the SEC should be allowed to continue spreading these misconceptions.
Key Points:
- Alderoty criticized Gensler for misstating the law and the Howey test, claiming that tokens alone are not investment contracts.
- Ripple had previously obtained a significant ruling that determined the XRP token was not a security when sold on exchanges.
- Ripple CEO Brad Garlinghouse also emphasized the importance of this decision, as it challenged the SEC’s claims that most tokens are securities.
- Gensler acknowledged that some cryptocurrency projects involve entrepreneurs and may fall under the Securities Act’s jurisdiction.
- However, Gensler clarified that bitcoin, unlike other assets, would be regulated by the Commodity Futures Trading Commission (CFTC) rather than the SEC.
Hot Take
The ongoing debate between Ripple and the SEC highlights the need for clearer regulations and definitions in the crypto industry. While Ripple celebrates its victory in the XRP case, Gensler’s statements indicate that the SEC still considers many tokens to be securities. This disagreement further emphasizes the necessity for regulatory clarity to foster innovation and protect investors in the evolving cryptocurrency landscape.
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