Stu Alderoty, Ripple general counsel, has stated that there is a single legal question at the center of the lawsuit filed by the Securities and Exchange Commission (SEC) against the US-based blockchain payment firm and its top executives.
It can be recalled that the U.S. regulator officially filed a lawsuit that accuses Ripple of selling the digital token XRP (digital asset it terms as an unregistered security) over the last seven years.
The lawsuit initiated by the SEC has prompted Ripple’s lawyer to question SEC on why it failed to file the complaint for the past seven years.
In a series of tweets on 23rd December, Alderoty stated that the story provided by the regulator is incomplete:
“Seeing lots of tweets spreading misinformation (legal and otherwise). Here are some facts: 1. First line of the SEC complaint alleges: “From at least 2013…” (years before the DAO Report). Yet the complaint was not filed for 7 years and the day before the Chair leaves office?!
“There are no ‘fraud’ or ‘misrepresentation’ claims. There is one legal question: Did certain of Ripple’s distributions of XRP constitute an investment contract? We look forward to litigating that in Court and providing the industry the clarity it deserves.
As always, the SEC cherry-picked and truncated the facts, quotes, etc. Ex: no mention that throughout 2018, Ripple’s XRP sales represented only 0.095% to 0.43% of global XRP volume and in Q1 2019, those sales amounted to 0.22% of the overall trading volume.”
SEC Complaint Contradicts Other US Government Clarifications
Additionally, Ripple general counsel noted that the allegation leveled against the payment firm contradicts other clarifications made by the United States government about five years ago:
“In 2015, the US Government concluded XRP was a virtual currency. Last I checked, the SEC is still part of the US Government. Here’s the plus side –– the industry will finally get the clarity it deserves. Goodbye ‘Howey test,’ hello ‘Ripple test.’”
The World Will Soon Hear Ripple’s Side of the Story
On 24th December, Alderoty emphasized that the suit filed by SEC is still an allegation, stating that only Courts are in the position to pass the final verdict.
Ripple CEO Brad Garlinghouse also told the world to get ready to hear the payment firm’s side of the story:
“A very important reminder! Thus far the world has heard the SEC’s version of reality. The legal process will unfold from here and the world will have a much more robust and complete picture of the facts soon.”