The European Union’s Initiative to Establish Its Own Regulatory Authority similar to SEC

The European Union's Initiative to Establish Its Own Regulatory Authority similar to SEC

Ripple’s Chief Legal Officer Criticizes SEC and the European Union’s SEC Equivalent

Stuart Alderoty, the Chief Legal Officer of Ripple, has conveyed the belief that the United States Securities and Exchange Commission (SEC) is becoming irrelevant. This observation falls on the backdrop of a legal feud between Ripple Labs and the SEC following the latter’s decision to sue the former back in 2020. The move has brought whole lot of backlash from across the digital currency community, with industry leaders joining in on saying that the Commission appears to be waning on the international scene.

Ripple Chief Legal Officer Heavily Criticizes Securities Regulator

Alderoty heavily criticized the SEC on Twitter for numerous reasons, mentioning that the SEC has been losing in court and criticized by judges for shady behavior. He likewise pointed out that it’s becoming irrelevant on the international stage. The SEC, on the other hand, seems to be standing firm and has even suggested that it would investigate cases rather than prejudge the matters involved. This stance hasn’t impressed Alderoty, who took the chance to hit out at the SEC even further.

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Alderoty referred to Gensler’s recent remarks, pointing out that Ripple was sued, but not charged with dishonesty, and that Gensler has already prejudged cryptocurrency and filed suit against others without conducting any investigation into the underlying issues. Ripple obtained a partial victory against the SEC when a judge ruled that it did not violate federal securities law by selling XRP on cryptocurrency exchanges. Still, the ruling didn’t settle the dispute entirely, and the Court is yet to decide on the legality of Ripple’s institutional sales of XRP tokens.

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Why Europe Desires to Build Its Regional SEC

In the meantime, Europe has intends to create its own version of the SEC. European Monetary Authority President Christine Lagarde has proposed the formation of a regional equivalent to the SEC to empower the European Union’s securities watchdog, the European Securities and Markets Authority (ESMA). Lagarde believes that implementing a single rulebook to govern the securities market across the European Union can be achieved by giving additional authority to ESMA, which could notably expand the supervision of financial resources markets that continues  to be largely at the national level.

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Hot Take

Although while Ripple’s legal battle with the SEC continues  to unfold, the SEC is aiming to solidify its ground. In the meantime, in Europe, Christine Lagarde has initiated discussions to empower ESMA further, which could lead to the establishment of a regional SEC equivalent. These moves demonstrate a push for stricter regulations and supervisory powers in both the United States and Europe.

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