Ripple CLO Stuart Alderoty Explains Securities, Investment Contracts, and Digital Currencies in Skit
Stuart Alderoty, the Chief Legal Officer of Ripple, recently presented a parody skit called “After Hours” to explain the definitions of securities and investment contracts. The skit was inspired by the informal and educational “Office Hours” series by the U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler.
Key Points:
- Alderoty explains that securities include shares of stock, where companies owe a fiduciary duty to shareholders.
- He clarifies that regardless of how you buy a stock, the fiduciary duty remains.
- Alderoty differentiates investment contracts from digital assets, highlighting that digital tokens alone are commodities or virtual currencies, not investment contracts.
- He criticizes the SEC’s attempt to gain jurisdiction over things that are not securities, stating that the law does not work that way.
- Alderoty’s explanation aligns with the ruling in the SEC v. Ripple case, where it was determined that XRP is not an investment contract.
Hot Take
Alderoty strongly opposes the SEC’s stance and believes that tokens, by themselves, are not investment contracts. He emphasizes the need for clarity and accurate understanding of the law in the cryptocurrency industry.
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