The Ripple Community and the SEC: A Struggle for Justice

Stuart Alderoty, Ripple Labs’ chief legal officer, has joined forces with the XRP community, voicing support on X (previously known as Twitter) for Commissioner Hester Peirce of the United States Securities and Exchange Commission (SEC)

by Faruk Imamovic
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The Ripple Community and the SEC: A Struggle for Justice
© Getty Images News/Dan Kitwood

Stuart Alderoty, Ripple Labs’ chief legal officer, has joined forces with the XRP community, voicing support on X (previously known as Twitter) for Commissioner Hester Peirce of the United States Securities and Exchange Commission (SEC).

Their commendation stems from Peirce's public objections to what she perceives as “injustice” in the lawsuit against LBRY, a blockchain-based file-sharing and payment network. Alderoty, expressing gratitude towards Peirce, commented on the importance of confronting ongoing injustices head-on.

He noted, “When such injustices occur in non-fraud cases, particularly when consumers remain in limbo awaiting resolution in fraud cases, it might be time to bypass standard protocols”. He even suggested the potential for submitting an amicus brief to address pressing issues directly.

SEC's Increasing Oversight of Cryptocurrency Exchanges

The SEC's intense scrutiny of the burgeoning cryptocurrency space is hard to ignore. Commissioner Peirce underscored this sentiment when she pointed out that the regulatory body has launched a series of enforcement actions against prominent cryptocurrency exchanges, including household names like Ripple, LBRY, Kraken, Binance, and Coinbase.

The LBRY lawsuit, in particular, stood out for Peirce. However, she refrained from delving deep into the matter, citing the constraints of ongoing litigation. Earlier this year, LBRY faced the SEC's gavel. In July, the regulatory body ruled that LBRY had breached Section 5 of the Securities Act of 1933.

As a result of this judgment, LBRY was handed a stern prohibition, preventing it from partaking in any unregistered cryptocurrency securities offerings linked to its native token. Despite initially challenging the SEC's decision through an appeal, LBRY later withdrew its appeal.

Throughout the legal ordeal, the XRP community stood firmly by LBRY's side. Regrettably, after a protracted legal battle which culminated in a win for the SEC, LBRY announced its shutdown. The platform cited a combination of financial strain and the mounting pressure from regulators as the primary drivers behind this unfortunate conclusion.

As cryptocurrency continues its dance with mainstream acceptance, this series of events serves as a stark reminder of the significant regulatory hurdles the industry must navigate. The collective voice of the XRP community, echoing Alderoty's sentiments, further emphasizes the need for clarity and fairness in the regulatory landscape.

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