Spot Bitcoin ETF Approval Result of Legal Enforcement
Ripple’s chief legal officer, Stuart Alderoty, stated that the approval of a spot Bitcoin ETF in the United States was made possible due to the setbacks the U.S. Securities and Exchange Commission (SEC) faced in court. He criticized the SEC, referring to it as an “out of control regulator.”
Court Ruling on Grayscale Lawsuit
Alderoty mentioned that the ETF approval was a direct outcome of court cases where the SEC lost. In a ruling on August 29, 2023, the US Court of Appeals for the District of Columbia Circuit judge stated that SEC officials acted arbitrarily and capriciously when denying the conversion of Grayscale Bitcoin Trust (GBTC) into an ETF. The judge noted that there was an imbalance in treatment compared to approved bitcoin futures ETF applications.
SEC Damaging Reputation: Commissioner’s Statement
The Ripple legal chief reiterated SEC Commissioner Hester Peirce’s statement following the Bitcoin ETF approval. The Commissioner expressed her concern that the SEC’s regulatory actions against cryptocurrencies had pushed retail investors towards less efficient methods of gaining bitcoin exposure. She also emphasized that these actions have created a negative perception of the SEC and hindered innovation in the industry.
Prejudice Against New Products and Ripple
Peirce further explained that the SEC’s approach to new product applications showed a bias against innovation. This is particularly relevant in the case of Ripple, which has been operating outside of the US since facing a lawsuit from the SEC in December 2020. In a significant setback for the agency, a judge ruled earlier this year that XRP token sales to retail buyers were not securities.
Hot Take: Ripple Lawyer Criticizes SEC for Spot Bitcoin ETF Approval
Ripple’s chief legal officer, Stuart Alderoty, believes that the approval of a spot Bitcoin ETF in the United States was only possible due to the setbacks faced by the SEC in court. He criticized the SEC for being an “out of control regulator.” The court ruling in the Grayscale lawsuit highlighted the SEC’s arbitrary and capricious behavior. SEC Commissioner Hester Peirce also expressed concerns about the agency’s actions, stating that they have harmed its reputation and hindered innovation in the crypto industry. The SEC’s bias against new products and services was particularly evident in their treatment of Ripple. Overall, this spot Bitcoin ETF approval has raised questions about the SEC’s regulatory approach and its impact on the market.
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