Stuart Alderoty, Ripple’s chief legal officer, recently took to social media platform X to share his thoughts on the ongoing litigation between Consensys and the United States Securities and Exchange Commission (SEC). Alderoty referred back to a statement he made in 2022, noting that it has held up well over time, as he criticized the SEC’s approach to regulating cryptocurrencies, specifically Ethereum, and highlighted the expansion of the regulator’s jurisdiction as a major issue.
Consensys, a supporter of Ethereum, has accused the SEC of hindering developers and market participants with its perceived hostile stance. The company argues that this approach prevents innovative progress in the sector. In May 2022, Alderoty expressed concern about the SEC’s tendency to categorize almost all tokens, except for Bitcoin, as securities, describing it as “a combination of bad law and bad policy.”
“We all agree that consumer and market protections are necessary. However, classifying every token, except for BTC, as a security is a flawed approach that stems from the SEC’s desire to gain control over this asset class. The SEC’s jurisdiction has its limits,” Alderoty stated.
The situation escalated in April when the SEC sent a “Poços Notice” to Consensys, indicating the possibility of enforcement action and suggesting that the popular Metamask wallet might be operating as an unregistered broker, thereby violating security laws. In response, Consensys hired Watchtell’s team of renowned lawyers, following a path similar to Coinbase, to confront the regulator.
Interestingly, Consensys leader Joseph Lubin had previously considered the SEC as an ally, stating, “I believe they truly understand this space… We believe they understand… They view the Ethereum network token and issuance mechanism as decentralized, and therefore, transactions involving these specific assets are not considered securities transactions.”
This dispute between Consensys and the SEC adds to the ongoing debate surrounding cryptocurrency regulation in the United States. The issue involves complex legal matters and has implications for the future of technological and financial development in an increasingly digitalized global environment.
Disclaimer: The views and opinions expressed in this article, by the author or anyone mentioned, are for informational purposes only and should not be considered as financial or investment advice. Investing or trading cryptocurrencies carries a risk of financial loss.
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