Ripple CLO Alderolty Firmly Supports Kraken Amidst SEC Lawsuit
Ripple’s Chief Legal Officer, Stuart Alderoty, has publicly supported crypto exchange Kraken in its ongoing legal dispute with the U.S. Securities and Exchange Commission (SEC) regarding alleged violations of securities law. On Friday, U.S. District Judge William H. Orrick denied Kraken’s appeal to dismiss the SEC lawsuit and instructed the exchange to respond to the complaint within 20 days.
Ripple CLO Backs Kraken
In response to the recent ruling, Ripple’s CLO, Stuart Alderoty, highlighted specific details of the court’s decision in the Kraken vs. SEC lawsuit, asserting that the court has once again affirmed the absence of a “crypto asset security.” Alderoty described the ruling as a setback for the SEC, criticizing the regulator’s enforcement-centric approach to regulation. He characterized the decision as unfavourable news for the SEC.
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Kraken’s Chief Legal Officer, Marco Santori, emphasized a federal court ruling indicating that none of the tokens traded on Kraken qualify as securities. The judge expressed uncertainty and confusion regarding the SEC’s characterization of Kraken tokens as “crypto asset securities.”
SEC Lawsuits
Santori underscored that the court criticized the SEC’s lawsuit tactics and questioned the agency’s insistence that a “written contract” is necessary to define a security, emphasizing that the Court has made the same distinction as in Ripple’s case, concluding that a token is not a security, but agreements surrounding the token could be.
Santori clarified the court’s decision, indicating that the SEC’s “tokens are securities” theory was not supported, requiring the regulator to prove that every transaction on Kraken would be a security. He reiterated Kraken’s readiness to contest the SEC’s Howey Test criteria and emphasized the company’s determination to prevail in the lawsuit.
Santori called out the SEC for its enforcement-centric regulatory strategy, cautioning that it could have significant implications for the crypto industry. He criticized the potential cost and time implications of applying this standard across the crypto industry, leading to prolonged litigation. Santori emphasized that the ruling validates Kraken’s stance that the SEC cannot effectively regulate crypto solely through enforcement.
SEC Regulation Impacts on Industry Players
The ongoing regulatory actions by the SEC are impacting various industry players, such as Coinbase and Binance, prompting crypto market participants to make adjustments to align with regulatory demands. For instance, Binance has intensified its compliance efforts by expanding its compliance team following the SEC’s lawsuit.
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Kayode Michael is a seasoned cryptocurrency analyst, successful trader, and skilled writer with a strong command of cryptocurrency analysis and price action. He leverages his technical analysis skills to provide valuable insights into emerging market trends and potential opportunities for investors to make informed decisions.
