Stuart Alderoty, the lead counsel representing Ripple Labs, recently released a video on social media with the intention of educating people on the complexities of securities, investment contracts, and digital assets. Despite being informative, the video has sparked debate over its seemingly contradictory stance.
In his Platform X video, Alderoty argued that digital assets are not securities in the same way that orange plantations, barrels of whiskey, and payphones are not. However, he suggested that those same assets may be regarded as securities if they are packaged into investment contracts with promises of profit. This has caused confusion among viewers over the distinction between security and non-security.
Alderoty further clarified that investment contracts involve one party selling assets to another in exchange for monetary rewards and a promise of increasing the value of the investment. This explanation may be in support of Ripple’s case in its ongoing litigation against the SEC, which argues that XRP, Ripple’s native cryptocurrency, is not a security.
The Ripple lawyer also aimed criticism at individuals represented by a picture of Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC). Alderoty accused them of causing confusion around the classification of digital tokens, and suggested that the SEC is overreaching in regulating the crypto space.
Alderoty finished with the remark, “Consumer protection is essential, but it is not always equivalent to the SEC’s jurisdiction.” This statement has received a mixed reaction, with some claiming that consumer protection is why regulatory oversight is necessary, while others see it as a valid point that does not negate the need for clear guidelines on the classification and regulation of digital assets.
