Ripple executives slam the SEC’s inconsistent handling of crypto cases, accusing the agency of hypocrisy and unclear regulations.
Bollywood Fever: Ripple executives have criticized the U.S. Securities and Exchange Commission’s (SEC) handling of cases against the crypto industry.
On Tuesday, the SEC announced plans to amend its complaint against crypto exchange Binance concerning “Third Party Crypto Asset Securities,” specifically targeting SOL, ADA, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI, according to a court filing.
Over the past year, the SEC has initiated several cases against crypto firms, arguing that some platforms need to be registered and classifying certain cryptocurrencies as securities. Last year, the SEC sued Binance Holdings and its former CEO Changpeng Zhao, accusing the exchange of deceiving customers, failing to prevent U.S. investors from using Binance.com, misappropriating funds to investment accounts owned by Zhao, and operating as an unregistered exchange.
Similarly, the SEC sued Coinbase last year for allegedly operating as an unregistered exchange, broker, and clearing agency. In this case, the SEC identified SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO as “crypto asset securities.”
“When a judge signals B.S. on the SEC’s claim that 10 tokens on Binance are securities, the SEC says ‘never mind,'” said Stuart Alderoty, Ripple’s chief legal officer, in a post on X. “But these tokens are left out to dry in the Coinbase suit. This isn’t how to regulate.”
Ripple CEO Brad Garlinghouse called the amended Binance complaint “hypocrisy.”
“Chair Gensler testifies the rules are clear, yet his SEC can’t figure them out and applies them haphazardly, festering more industry confusion,” Garlinghouse said in a post on X.
The SEC and Ripple have been entangled in a legal battle for years after the SEC accused Ripple of raising $1.3 billion through the sale of XRP, which it claims is an unregistered security. Last year, Judge Analisa Torres of New York ruled that some of Ripple’s sales of XRP, called programmatic sales, did not violate securities laws due to a blind bid process. However, she ruled that other direct sales to institutional investors were securities.
SEC Chair Gary Gensler has repeatedly asserted that crypto platforms need to register and that most cryptocurrencies are securities.
Justin Slaughter, policy director at Paradigm, suggested that some may be overinterpreting the SEC’s filing. He noted that the SEC could still argue that those tokens are securities in other cases. The judge in the Binance case indicated that she was “likely to find that the tokens were all not securities at all times,” Slaughter said in a post on X.
“So rather than take another bad loss on the beware of their approach, they’re backing down,” Slaughter said. “But so far they’re only backing down here. There’s no sign yet that they’re making a similar filing in the Coinbase case in New York which went less bad for the SEC.”
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