Ripple’s Legal Chief Issues Warning
Ripple’s chief legal officer, Stuart Alderoty, delivered a critical message to the SEC on December 31. Speaking through social media, he highlighted key legal principles regarding the regulation of digital assets. His remarks emphasized that the SEC’s authority is limited to securities transactions and does not extend to asset sales without post-sale obligations.
Clarifying Securities vs. Asset Sales
Alderoty used a simple analogy to explain the difference between securities and asset sales. He noted:
- Selling a gold bar tied to a contractual right in a gold mine? Likely a securities transaction.
- Selling the same gold bar without additional rights? Just an asset sale, outside the SEC’s purview.
He further argued that the SEC cannot arbitrarily expand its jurisdiction based on subjective views about disclosure requirements. Instead, regulatory actions must adhere to clear legal definitions.
Digital Tokens: A Clear Distinction
Alderoty reiterated Ripple’s stance on the classification of digital tokens. He stated, “A token is never a security, though it can be involved in a securities transaction.” This statement reinforces the idea that the asset itself should not be automatically regulated as a security.
Additionally, he rejected claims that tokens could evolve from securities into non-securities, calling the notion legally baseless. Alderoty labeled this belief as a “made-up fallacy,” lacking any foundation in law.
Ripple’s Call for Legal Clarity
In his closing remarks, Alderoty expressed hope for consistency in the SEC’s approach moving forward. He urged regulators to respect established legal principles, avoiding unnecessary conflicts in 2025 and beyond.
Ripple’s legal team remains steadfast in challenging regulatory overreach, ensuring clarity for the crypto industry.