The chief legal officer at Ripple Labs blockchain decacorn Stuart Alderoty has taken to the X social media platform (formerly famous as Twitter) to share details of an early settlement that the SEC regulator offered the company in the past.
It was three years ago, before Jay Clayton initiated legal action against Ripple and its two high-ranking executives, Brad Garlinghouse and Chris Larsen (also Ripple’s co-founder).
Early settlement offered to Ripple
In his recent tweet, Stuart Alderoty revealed that back in 2020, the SEC offered the following settlement terms to Ripple and Brad Garlinghouse as its chief executive officer. The regulator would announce to the cryptocurrency market that XRP is a security and then “the market would be given a short window to ‘come to compliance’.”
Before the SEC sued Ripple, Chris and Brad (3 yrs ago today) they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to “come into compliance.” We said no because: (1) XRP is not a…
— Stuart Alderoty (@s_alderoty) December 22, 2023
Ripple immediately rejected this deal. Alderoty elaborated on the reasons why the SEC’s offer was turned down: Number one, XRP is not a security. Number two, and Alderoty put special emphasis here, the SEC never created a framework for cryptocurrency compliance.
“U.S. crypto industry lived to fight another day”
Ripple always wanted to make the regulators accept the following idea: XRP is not a security, and the whole legal battle that lasted three years until the recent victories was about proving that fact. “We put everything on line,” Alderoty added and confessed that few people believed Ripple could win this case against the SEC.
In the course of the courtroom drama and the legal fighting, he said, Ripple managed to expose the SEC for “the hypocritical tyrant it is,” and the crypto industry in the USA “lived to fight another day.”
In the summer, federal judge Analisa Torres issued a ruling that XRP sales in the secondary market were not qualified as security sales. This major win helped XRP briefly surge to an $0.71 high. The second victory followed in the fall, when the SEC regulator on its own initiative withdrew the personal charges against Chris Larsen and Brad Garlinghouse.
Alderoty expects the final resolution of the case to take place next year, fearing, however, that the SEC with its harsh overreaching approach may affect other top players within the cryptocurrency industry.
