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Ripple’s Legal Chief with Bleak Outlook for US for 2024
- Ripple’s Chief Legal Officer, Stu Alderoty, predicts a challenging regulatory future for crypto in 2024, with Ripple’s legal battles potentially concluding but not significantly altering the SEC’s enforcement-focused approach.
- He anticipates a mix of legal and legislative developments that could leave US crypto firms at a global disadvantage.
- Additionally, he criticised the SEC’s approach to regulation, highlighting a series of court rulings that pointed out inconsistencies and lack of good faith in the SEC’s actions, suggesting a growing judicial resistance to the SEC’s regulatory methods in the space.
A Peek into the Legal Crystal Ball
Stu Alderoty, Ripple’s Chief Legal Officer (CLO) foresees a challenging landscape for crypto regulation in 2024. He predicts that Ripple’s protracted legal battle with the SEC will finally conclude, marking an end to a significant chapter in Ripple’s history. However, this resolution does not indicate a broader change in the SEC’s approach, as Alderoty anticipates that the SEC will continue its strategy of ‘regulation by enforcement.’
Ripple’s CLO said the courts will play a critical role in moderating the SEC’s assertive tactics. He anticipates that ongoing legal challenges may lead to a pivotal Supreme Court case, potentially establishing significant precedents for the future of crypto regulation.
Judges will continue to be the last line of defence against the SEC’s overreach, and the SEC will continue to lose major issues in the courts – setting the table for a showdown in the Supreme Court.
Stuart Alderoty, Ripple Chief Legal Officer Don’t Expect Congress to Rush in to Fix Things Either
On the legislative front, the legal chief foresees a mixed scenario. While Alderoty expects that the US Congress will reach a general consensus on the need for crypto regulation, he believes that there will be substantial disagreement over the specific path forward. This will likely lead to a regulatory stalemate, potentially leaving US crypto firms in a precarious position. Meanwhile, other countries will continue to make significant advances in crypto regulation, creating a favourable environment for firms to engage with the industry outside the US.
A ‘troubling pattern’ in SEC Enforcement
Not long ago Alderoty criticised the SEC approach to crypto in a Tweet about a series of legal proceedings involving the SEC and various crypto-related entities. The lawyer highlighted the courts’ critical stance towards the SEC’s actions and arguments.
For example, in the SEC vs. Ripple case on July 12, 2022, the court pointed out the SEC’s “hypocrisy,” noting its inconsistent arguments and a lack of faithful adherence to legal principles. In another case involving Coinbase on June 6, 2023, Alderoty said that the court agreed that the SEC had failed “to respond in good faith to Coinbase’s petition for crypto rulemaking.”
Similarly, in the Grayscale vs. SEC case on August 29, 2023, the court criticised the SEC for its arbitrary and “inconsistent treatment of similar products.” Lastly, in the SEC vs. Debt Box case on November 30, 2023, the court even considered sanctions against the SEC for making false and misleading representations. These rulings collectively suggest a judicial pushback against the SEC’s approach in regulating the crypto space.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
