Stuart Alderoty, Ripple’s Chief Legal Officer, has strongly criticized Gurbir Grewal, the Director of Enforcement at the Securities and Exchange Commission (SEC), for his recent comments on compliance efforts within the crypto industry.
During a recent SEC event, Grewal accused the crypto industry of using tactics to evade regulatory oversight, such as relocating or registering in different jurisdictions. He also defended the SEC’s regulatory approach, denying any allegations of overreach.
However, Alderoty pointed out the inconsistencies in Grewal’s statements, citing instances where the SEC may have overstepped its boundaries and abused its authority. He referenced the DebtBox sanctions, a Ripple judge’s criticism for lacking “faithful allegiance to the law,” and the “arbitrary and capricious” ruling in the Grayscale case.
Furthermore, Alderoty criticized the SEC’s inconsistent application of the Howey test, a standard used to determine if a transaction qualifies as an investment contract. He noted that the SEC’s guidance on the Howey test, available on its website, varies and leads to confusion within the industry.
Alderoty stressed the importance of the SEC addressing these concerns to restore trust and credibility. He urged the regulator to acknowledge and rectify the institutional damage caused by its approach to crypto regulation, emphasizing the need for transparency and accountability.
In conclusion, Alderoty stated that if the SEC truly wants to repair the harm caused during what he called a “misguided war on crypto,” it must confront these issues and adopt a more responsible and balanced regulatory stance.
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