Stuart Alderoty, Chief Legal Officer of Ripple, had revealed that the SEC wanted to strike a deal to turn Ripple to a security 3 years before the lawsuit. Alderoty made this known via a post on his X account on December 23, detailing how the SEC offered them some conditions to announce XRP as a security.
“Before the SEC sued Ripple, Chris and Brad (3 yrs ago today) they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to “come into compliance,” said Alderoty.
Back in December of 2020, the SEC charged Ripple and two of its executives for selling XRP worth upwards of $1.3 billion as “unregistered securities.” However, this July, Ripple got a partial court win, with Judge Analisa Torres ruling that selling XRP on public exchnages wasn’t unregistered securities offerings. Later in October, Torres also rejected the SEC’s request to appeal the ruling.
The SEC also got a partial win in the case, since the regulator was able to convince the court how Ripple’s selling $728.9 million worth of XRP to hedge funds and other “sophisticated” buyers violated the law. Fast forward to few days ago, new updates from Alderoty are baring what happened behind closed doors with the SEC back in 2020.
According to Alderoty, Ripple rejected the SEC’s offer for two major reasons, the first being that SEC is not a security and that there was no established “framework for crypto compliance” by the SEC.
“We said no because: (1) XRP is not a security; and (2) the SEC never built a framework for crypto compliance. 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 and the industry in the U.S. lived to fight another day. Onward to 2024,” continued Alderoty.
This is just one of the SEC’s tussles with several big names in the cryptocurrency industry this year, including Binance Coinbase, and Kraken, among others. The SEC had back in June, charged Coinbase for “operating as an unregistered securities exchange, broker, and clearing agency.” Coinbase had also sued the SEC over their silence regarding a petition of rulemaking, which the SEC is yet to resolve.