Ripple’s Chief Legal Officer Reflects on Recent Terraform Labs Ruling

In a social media post, Stuart Alderoty, the chief legal officer of Ripple, commented on the recent ruling in the Terraform Labs case.

Alderoty abstained from adopting a conclusive position regarding the Terraform case but emphasized three crucial elements of the court’s ruling.

The speaker emphasized the critical significance of evidentiary foundations in legal decisions, drew attention to the absence of criticism or mention of a comparable Ripple case by Judge Jed Rakoff, and scrutinized the SEC’s persistent approach to regulating cryptocurrencies via protracted, token-by-token litigation.

The attorney considers this approach ill-advised and motivated primarily by a desire for political influence rather than sound policy.

According to reports, Judge Rakoff sided with the SEC in its litigation against Terraform Labs.

Upon applying the Howey Test, the court deemed the digital assets of Terraform Labs, which included UST, to be unregistered securities.

Although this ruling represents a significant triumph for the SEC, it is improbable that it will provide additional elucidation regarding the regulatory framework for digital assets.

Recent remarks by Alderoty indicate a shift in how the cryptocurrency industry views the SEC’s authority.

Despite the SEC’s ongoing efforts to regulate the sector, the leading attorney recently stated, as reported, that the industry is becoming more resilient to the agency’s legal threats.

As the cryptocurrency industry enters 2024, it faces protracted legal disputes and regulatory ambiguities.

The continuation of the SEC’s protracted campaign against major cryptocurrency participants, including Ripple, is highly probable.