Ripple XRP Legal Chief Criticizes SEC Brief on Coinbase Lawsuit
The legal chief of Ripple XRP, Stuart Alderoty, has expressed his disagreement with the U.S. Securities and Exchange Commission (SEC) brief that opposes Coinbase’s motion to dismiss the SEC lawsuit against it. The SEC had accused Coinbase of operating as an unregistered national securities exchange, broker, and clearing agency in its complaint filed on June 6, 2023.
The XRP Ruling
In its filing on October 3, 2023, the SEC argued that Coinbase was incorrect in citing the XRP ruling, where Judge Analisa Torres determined that Ripple did not violate U.S. federal securities laws when selling tokens to retail buyers. The SEC claimed that some of the crypto assets listed on Coinbase meet the criteria of investment contracts under the Howey Test and that token issuers encouraged investors to expect an increase in value.
The Howey Test is crucial in determining whether issuers guarantee any profits from investments. It was also central to the Summary Judgment in the XRP lawsuit on July 13, 2023. Judge Torres denied the SEC’s motion to file an interlocutory appeal on October 4, 2023, stating that the SEC failed to explain how the Court “improperly applied the Howey Test” to the facts of the Ripple lawsuit.
US SEC Claims: Lack of Support
Ripple’s Stuart Alderoty criticized the SEC’s brief in the Coinbase lawsuit, stating that its claims lacked citation or support. John Deaton, who represents thousands of XRP token holders in the SEC lawsuit, previously criticized the SEC’s application of the Howey Test to crypto assets. Deaton argued that the SEC could not provide a single lawsuit where the sale of crypto tokens was linked to the Howey Test.
There is so much wrong with the SEC’s brief in the Coinbase case I don’t know where to begin. Let’s start with the SEC claiming, without citation or support, that digital assets have no innate or inherent value while collectible baseball cards do.
— Stuart Alderoty (@s_alderoty) October 5, 2023
Hot Take: Ripple XRP Legal Chief Challenges SEC’s Arguments in Coinbase Lawsuit
Ripple XRP’s legal chief, Stuart Alderoty, has criticized the U.S. Securities and Exchange Commission (SEC) for its brief opposing Coinbase’s motion to dismiss the SEC lawsuit. Alderoty argues that the SEC’s claims lack citation or support. This comes after the SEC accused Coinbase of operating as an unregistered securities exchange, broker, and clearing agency. The SEC’s application of the Howey Test to crypto assets has also been questioned by Alderoty and John Deaton, who represents XRP token holders in the lawsuit. It remains to be seen how the court will rule on Coinbase’s motion to dismiss and whether the SEC’s arguments will hold up.
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