ipple's Chief Legal Officer Stuart Alderoty took issue with recent statements made by Gurbir Grewal, the Director of Enforcement at the US Securities and Exchange Commission (SEC). In a speech at an SEC event, Grewal suggested that some in the emerging crypto industry were attempting to evade the regulator's oversight through measures such as relocating operations or registering in different jurisdictions.
However, Alderoty argued that Grewal had failed to acknowledge inconsistencies and overreach in the SEC's regulatory actions. The Ripple executive pointed to instances where the SEC had been criticized by judges for a "lack of 'faithful allegiance to the law'" and engaging in a "gross abuse of power." Alderoty also highlighted the SEC's seemingly arbitrary application of the Howey test for determining securities, which industry figures say has caused confusion and uncertainty.
Calls for Transparency and Accountability
In his remarks, Alderoty urged the SEC to take responsibility for the "institutional damage" caused by its approach to crypto regulation over the past years. The Ripple legal head believes the regulatory body must address issues that its former General Counsel said led to "greater confusion."
Alderoty described the SEC's actions as constituting a "misguided war on crypto" and said the agency needed to "get off its soap box" if it hoped to repair trust in the industry. He argued the SEC must demonstrate greater transparency in its processes and own up to shortcomings honestly identified by other figures. Only then, Alderoty stated, could the SEC's credibility be restored in its oversight of the emerging digital asset sector.
Regulatory Consistency is Key
While the SEC maintains it provides clear regulatory guidance, Alderoty argued confusion and uncertainty remain due to the body's seeming whimsical application of rules. The Ripple legal head also questioned the SEC's claims of transparency, integrity, and faithfulness to the law in light of issues raised about its actions. To repair damaged trust and credibility, Alderoty believes the SEC must acknowledge shortcomings, commit to consistency, and demonstrate responsibility in its oversight approach going forward. Only then, according to Alderoty, can the SEC and the industry move towards a constructive regulatory path.
