Chief Legal Officer of Ripple, Stuart Alderoty, used the X app to highlight some differences in the cryptocurrency lawsuits that the US Securities and Exchange Commission (SEC) had started, which he labeled as “troubling patterns.”
Unsettling Patterns in SEC-led Crypto Cases
The long-running lawsuit between Coinbase and the SEC, which has been intensifying in recent months, is one of the most well-known cases in this area. Beyond Coinbase, the CLO of Ripple found some patterns that the SEC has repeatedly shown in various lawsuits, such as the ones involving Ripple Labs and Grayscale Investments.
Alderoty began by pointing out that the court found evidence of the SEC’s hypocrisy in presenting contradictory claims in its legal battle with the cryptocurrency payment company Ripple. In addition, the regulator was charged with not acting in accordance with a “faithful allegiance to the law.”
It’s important to remember that the Ripple executive brought attention to these issues during the height of the Ripple v. SEC legal dispute last year.
Once more, Coinbase and the regulator are at odds over the ambiguity of cryptocurrency regulations. Coinbase had previously asked the SEC to give the cryptocurrency industry regulatory clarity, but to no avail. Earlier this year, Coinbase filed a Mandamus petition against the agency. The SEC denied the cryptocurrency exchange’s request in response to the assertions claiming they were unfounded.
The court also acknowledges that the SEC did not fulfill its obligation to respond to Coinbase’s request for crypto rulemaking in a reasonable manner, as evidenced by the “troubling patterns” that were found.
SEC’s Loyalty Is Examined
In reference to its legal dispute with Grayscale, which started when the SEC denied the company’s request to transform its Grayscale Bitcoin Trust (GBTC) into a product with physical backing, Alderoty emphasized that the court found the SEC’s “arbitrary and capricious” treatment of similar products inconsistent.
In the end, this discovery proved to be crucial to the case’s outcome. The judge declared that the SEC had overlooked the “obvious financial and mathematical relationship between the spot and futures markets,” which helped Grayscale win the case.
The last pattern that Ripple CLO described was the court’s order for the SEC to provide an explanation for why it shouldn’t face penalties for giving false and misleading information about Debt Box to the tribunal.
The U.S. SEC’s operations in relation to its crypto lawsuit, allegiance, and rulemaking are likely to be threatened by all of these disparities, and they might also have an impact on Gary Gensler’s future role as the agency’s chairman.