Ripple Chief Legal Officer Critiques SEC’s Approach Amidst Coinbase Ruling

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Ripple Chief Legal Officer Critiques SEC's Approach Amidst Coinbase Ruling
  • Ripple’s CLO criticizes SEC’s complex ‘ecosystem’ definition affecting crypto’s legal status.
  • Despite legal challenges, XRP maintains stability with the potential for recovery.
  • Judicial interpretations vary in crypto law, impacting regulatory clarity.

In a recent statement, Ripple’s Chief Legal Officer, Stuart Alderoty, scrutinized the definitions of a crypto “ecosystem” as outlined in a March 27 court ruling concerning Coinbase. The ruling, made by Judge Katherine Failla, differentiated the term “ecosystem” to describe coordinated enterprises by issuers and promoters of thirteen crypto-assets. 

This distinction determined their status as “securities” under federal law. Alderoty criticized this approach, arguing that the Securities and Exchange Commission (SEC) overly complicates the concept. He suggests that acquiring a token always implies investment in an “ecosystem,” irrespective of the acquisition’s context.

The commentary follows a notable decision on March 27, where Judge Failla partially accepted Coinbase’s Motion to Dismiss (MTD) specific charges, excluding the allegation of Coinbase operating as an unregistered securities exchange. This legal scrutiny emerges amidst the broader regulatory debate over cryptocurrency and its classification under securities laws.

On the same accord, Alderoty referenced a separate case, the SEC vs. Ripple, to emphasize differing judicial interpretations. He lauded Judge Analisa Torres for her discernment in the Ripple case, contrasting her understanding of the evidentiary record with the SEC’s broad application of the “Howey” test to crypto assets. 

According to Alderoty, Torres’ judgment underscored the SEC’s deviation from established securities law, particularly in cases where direct promises to investors by promoters are absent. Despite these legal entanglements, Ripple’s cryptocurrency, XRP, maintained a stable trading range between $0.5685 and $0.6624. 

XRP/USD 4-Hour Chart (Source: TradingView)

Analysts observed a bearish trend, supported by technical indicators such as the Awesome Oscillator and the Relative Strength Index, both signaling a potential downturn. However, a recovery trajectory for XRP was proposed, contingent on overcoming significant resistance levels. Specifically, the aim is for a rebound from the $0.5344 support level to challenge the $0.6624 resistance.

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