Ripple Chief Legal Officer, Stuart Alderoty, has expressed strong expectations that the U.S. Securities and Exchange Commission (SEC) will adopt a more legally sound and balanced approach to cryptocurrency regulation in the upcoming year.
His comments come at a pivotal moment, as Ripple’s ongoing battle with the SEC nears a possible conclusion. Alderoty argues that the SEC’s focus should remain on traditional securities transactions rather than extending its authority into the crypto space without clear legal justification.
SEC’s Growing Role in Crypto Regulation: Limiting Overreach
Alderoty emphasized that the SEC must avoid expanding its jurisdiction beyond its legal mandate, especially in areas like cryptocurrency. He outlined a key principle: securities transactions should be the sole focus of the SEC. This is vital to ensure the agency does not overstep its bounds and create uncertainty within the market. Drawing from a simple analogy, Alderoty stated that selling a gold bar with additional rights attached could be considered a security transaction, but selling the same gold bar without any post-sale obligations would only be an asset sale—one the SEC has no authority to regulate.
This distinction is especially important as the SEC has been increasingly scrutinizing digital assets like XRP, aiming to determine if they qualify as securities. Alderoty hopes the SEC will adopt a more clear-cut approach to this issue, avoiding vague or subjective interpretations of disclosure requirements.
Ripple vs. SEC: A Battle That Could Shape the Future of Crypto Regulation
As the legal battle between the SEC and Ripple approaches its resolution, the future of XRP and broader crypto regulation hinges on the decision. With Paul Atkins, a known pro-crypto figure, potentially becoming the SEC Chair under a new administration, there’s optimism that his stance could tilt the legal scales in Ripple’s favor. If the SEC decides to abandon its appeal or if the agency’s enforcement strategy shifts, XRP could experience a significant price surge.
The key question remains: Is XRP a security? Alderoty believes the ongoing case will bring much-needed clarity. He points to Judge Torres’ prior rulings, which have already favored Ripple in several instances, and anticipates that the Second Circuit Court’s review may provide further legal backing for Ripple’s position.
No More “Evolving” Tokens: The SEC’s Fallacy?
One of the critical points Alderoty has raised concerns the SEC’s previous claims about tokens evolving from securities to non-securities over time. He firmly rejects this notion as a “made-up fallacy” with no legal basis, arguing that a token itself should not be classified as a security unless it is part of a securities transaction. According to Alderoty, this approach could bring the regulatory framework back to a more grounded legal interpretation, free from the subjectivity that has characterized some of the SEC’s recent decisions.
The Road Ahead for Ripple and XRP
The Ripple-SEC lawsuit is one of the most closely watched legal battles in the cryptocurrency space. The outcome could shape how the SEC handles other cryptocurrencies in the future. Analysts suggest that if the SEC changes its enforcement stance or drops its appeal against Ripple, it could trigger a massive surge in the price of XRP, giving a strong signal to the broader crypto market that regulatory clarity is on the horizon.
Ripple has already been showing resilience throughout the prolonged legal dispute, and with Alderoty’s strategic insights into the SEC approach, there is cautious optimism within the company and the XRP community.
As we move into 2025, Ripple’s legal team remains hopeful that the SEC’s regulatory actions will not only favor XRP but also set a more reasonable precedent for the treatment of digital assets going forward.
For now, the cryptocurrency world continues to watch closely as the Ripple case unfolds, with hopes that the SEC’s future moves will help clear the path for broader crypto adoption and market growth in the years to come.