Alexander Savenkov Ripple’s CLO, Stuart Alderoty, Criticizes SEC Chair Gary Gensler’s Views on Tokens
Stuart Alderoty, Chief Legal Officer (CLO) of Ripple, a cryptocurrency and payment services firm, has voiced his disagreement with recent remarks made by the U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler. During a recent congressional hearing, Alderoty objected to Gensler’s view, contending that his assertions inaccurately represent the law when suggesting that tokens, in and of themselves, are considered investment contracts.
Ripple’s Chief Legal Officer Accuses SEC Chair of Misrepresentation of Law Regarding Crypto Tokens
Recently, Ripple’s CLO, Stuart Alderoty, expressed discontent over statements made by Gary Gensler, Chair of the SEC, about cryptocurrency tokens. These remarks were made during a congressional hearing held before the U.S. Senate Appropriations Committee on July 19.
Alderoty took issue with Gensler’s repeated assertion that cryptocurrency tokens are securities, saying:
In the Senate hearing today, it’s shocking to hear Mr. Gensler continue to misrepresent the law (and the Howey test) by insinuating that tokens alone are investment contracts. Can the SEC continue to be permitted to propagate such inaccuracies?
On July 13, Ripple secured a significant ruling asserting that programmatic sales — those conducted on exchanges — of the XRP token could not be classified as securities. Alderoty hailed this decision, asserting that “as a matter of law,” XRP is not a security.
Brad Garlinghouse, Ripple’s CEO, also commented on the significance of this ruling. He stated that it directly impacted “the SEC’s allegations that nearly all tokens are inherently securities,” and he noted that this verdict would “likely set a positive precedent for other digital tokens in the U.S.”
Gensler’s Comments
During the congressional hearing where the U.S. Senate Appropriations Committee was reviewing the SEC’s budget for the 2024 fiscal year, Gensler suggested that many cryptocurrency tokens might fall under the Securities Act’s jurisdiction. He hinted that “generally speaking, there is some group of entrepreneurs behind those projects.”
Later in the hearing, Senator Richard Durbin inquired about the best ways to safeguard American consumers from cryptocurrency in the future. Gensler responded that the agency had a “robust authority” and clarified that “very few” cryptocurrencies fell outside their jurisdiction.
However, Gensler highlighted Bitcoin as one of the assets that doesn’t possess the characteristics of an investment contract under securities laws, indicating that it would be under the jurisdiction of the SEC’s sister agency, the Commodity Futures Trading Commission (CFTC).
We would love to know your thoughts on Ripple’s CLO, Stuart Alderoty’s reaction to Gary Gensler’s comments regarding most tokens possessing the attributes of securities contracts. Please share your thoughts in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about Ripple’s CLO Stuart Alderoty’s Reaction to SEC Chair Gary Gensler’s Token Statements
Who is criticizing the SEC Chair’s stance on cryptocurrency tokens?
Stuart Alderoty, Chief Legal Officer of Ripple, a cryptocurrency and payment services firm, is criticizing the stance taken by the SEC Chair, Gary Gensler. Alderoty disagrees with Gensler’s assertion that tokens alone can be considered as investment contracts.
What did Gary Gensler say about cryptocurrency tokens?
During a congressional hearing before the U.S. Senate Appropriations Committee, Gary Gensler, the SEC Chair, hinted that many cryptocurrency tokens might fall under the jurisdiction of the Securities Act. He suggested that these tokens are typically spearheaded by some group of entrepreneurs.
What was the outcome of Ripple’s recent ruling?
On July 13, Ripple secured a significant ruling determining that programmatic sales of the XRP token — sales conducted on exchanges — could not be classified as securities. The ruling was celebrated by Ripple’s CLO, Stuart Alderoty, and Ripple’s CEO, Brad Garlinghouse.
How did Brad Garlinghouse, Ripple’s CEO, respond to the ruling?
Brad Garlinghouse, Ripple’s CEO, noted the significance of the ruling. He said it directly challenged “the SEC’s allegations that nearly all tokens are inherently securities,” and he believed the ruling would likely set a positive precedent for other digital tokens in the U.S.
How does Gary Gensler view the jurisdiction of cryptocurrencies?
In a hearing, when asked about the best ways to safeguard American consumers from cryptocurrency in the future, Gary Gensler responded that the SEC had a “robust authority.” He clarified that “very few” cryptocurrencies fell outside their jurisdiction. However, he identified Bitcoin as an exception, stating that it doesn’t possess the characteristics of an investment contract under securities laws, and would fall under the jurisdiction of the SEC’s sister agency, the Commodity Futures Trading Commission (CFTC).
More about Ripple’s CLO Stuart Alderoty’s Reaction to SEC Chair Gary Gensler’s Token Statements
- Ripple’s Official Website
- U.S. Securities and Exchange Commission (SEC) Official Website
- SEC Chair Gary Gensler’s Biography
- U.S. Senate Appropriations Committee
- Commodity Futures Trading Commission (CFTC) Official Website
- Information on the Howey Test
- Details about the Securities Act
5 comments
Big win for ripple, hope other tokens get a fair treatment too. Cryptos need clarity not chaos, fingers crossed!
So relieved by the July 13 ruling. About time XRP got some recognition as not a security. No way we’d let Gensler’s SEC to muddle facts!
Regulation can be such a double edged sword. sometimes I think its needed but then I see how they can also stifle innovation. confusing times!
Clearly Mr. Alderoty and Ripple are on defense… Gensler’s not wrong about a lot of these tokens tho. Great report keep em coming!
What’s with Gensler? can’t he see tokens aren’t always securities? thanks for the article, interesting read.