The legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) continues to await a decision after the final briefs were submitted by both parties about a month ago. The latest development in the lawsuit was the intervention of Forbes journalist Dr. Roslyn Layton, who filed a motion to intervene to ask the court for access to the Hinman speech documents.
Nevertheless, Ripple’s chief legal officer (CLO) Stuart Alderoty has repeatedly pointed out the SEC’s misconduct in recent weeks. Two weeks ago, he wrote that SEC chairman Gary Gensler is a political liability for failing to establish proper regulation for over 40 million Americans who own cryptocurrencies.
Ripple CLO Demands Gensler’s Withdrawal
In his latest tweet, Alderoty draws attention to a gross misconduct by Gary Gensler that may yet be his undoing. The Ripple CLO writes:
Crypto lawyer PSA: Chair Gensler has again proclaimed that every cryptocurrency, except BTC, is an unregistered security. He now must recuse himself from voting on any enforcement case that raises that issue since he has prejudged the outcome. Antoniu v. SEC (8th Cir. 1989).
Alderoty’s tweet alludes to an interview by Gensler in New York Magazine in which he stated that “everything other than Bitcoin” is a security. In making this unequivocal and clear statement, however, Gensler may have erred, as Alderoty notes, citing Antoniu v. SEC.
In that case, the defendant SEC barred a stockbroker from employment with a firm for violating federal securities laws. The SEC initiated proceedings to permanently bar the stockbroker from all employment in the securities field.
However, an SEC commissioner made a monumental mistake, the court later ruled. While the proceeding was pending, the commissioner called the ban permanent.
The court found that the commissioner’s comments about the permanent ban on the stockbroker’s employment while the case was pending showed that the commissioner had prejudged the issue. The Commissioner’s continued participation in the debarment proceeding violated due process.
With his recent statement, Gary Gensler has thus disqualified himself from participating in any vote on a crypto-related securities case. As Alderoty explains, Gensler must now recuse himself from voting on any enforcement case since he has prejudged the outcome.
SEC Faces Another Battleground
Meanwhile, the SEC is also facing a new battlefield to fight with a XRP community attorney. Fred Rispoli of Hodl Law sued the SEC two months ago, asking the court to declare that Ether and the Ethereum network are not securities.
Remarkably, the SEC has filed a motion to dismiss the lawsuit. In its motion, the SEC makes this stunning statement:
Hodl Law’s own allegations make clear that the SEC has not reached a final decision about the Ethereum network or Ether.
Yet again, the SEC and Gensler contradict themselves. The first hearing day in the case is scheduled for March 13.
At press time, XRP was trading at $0.3741, down 0.3% within the last 24 hours.