In a startling revelation to the crypto community, Ripple’s Chief Legal Officer, Stuart Alderoty, has revealed an alleged attempt to coerce Ripple executives into accepting an unfavourable resolution ahead of the XRP lawsuit by the U.S. Securities and Exchange Commission (SEC).
On Saturday, Alderoty took to X to unveil the details of a settlement offer made by the SEC three years ago, just before they filed a lawsuit against Ripple and its executives, Chris Larsen and Brad Garlinghouse.
According to the lawyer, the SEC had proposed a settlement in which they would announce that XRP is a security, and the market would be given a brief window to “come into compliance.” However, Stuart noted that Ripple staunchly rejected the offer, asserting two main reasons. First, they maintained that XRP is not a security, and second, the SEC had failed to establish a framework for crypto compliance. Alderoty further emphasized that the core issue of the case was proving that XRP, as a cryptocurrency, is not inherently a security.
“No matter the spin that Clayton, Hinman, Gensler or anyone else puts on this case now, it was always about one thing – – proving that XRP is not, in and of itself, a security. We put everything on the line. Few thought we would win. But we did. In the process we exposed the SEC for the hypocritical tyrant it is,” wrote Alderoty.
This disclosure emerges at a pivotal point in the ongoing legal showdown between Ripple and the SEC concerning the sale of XRP. The legal battle, which commenced in December 2020, reached a significant milestone in July this year when Judge Analisa Torres ruled that XRP is not a security. Approximately two months later, the SEC decided to drop charges against both Garlinghouse and Larsen unconditionally.
That said, Alderoty’s bombshell disclosure comes on the heels of another outspoken critique from Ripple CEO Brad Garlinghouse. In a Friday tweet, Garlinghouse expressed his disapproval of SEC Chair Gary Gensler’s approach to cryptocurrency regulation, accusing Gensler of “stunning hypocrisy.” The crypto mogul also questioned the SEC’s consistency in handling significant financial controversies while purportedly advocating for consumer protection. Garlinghouse accused Gensler of cosying up to major financial fraud while claiming to champion consumer rights, thereby eroding the SEC’s integrity.
This public spat between Ripple’s leadership and the SEC has escalated over the past few months, with Garlinghouse likening Gensler’s management approach to that of an autocrat. Various other industry players have also urged Congress to scrutinize Gensler’s decisions, alleging that they have been detrimental to consumers and have favoured Wall Street interests.