Ripple had won a major victory in its legal battle with the US Securities and Exchange Commission (SEC), when the judge ruled that the sale of XRP on exchanges was not a security offering.
The decision was a “victory” for both the company and the cryptocurrency community, but Stu Alderoty, chief legal officer of Ripple Labs, stated that the search for regulatory clarity is not over yet.
Following the decision, the SEC claimed that the decision in favor of Ripple on secondary market sales was a “wrong decision”.
However, Alderoty said that Ripple will not shy away from a possible appeal from the SEC:
“We think the judge got this right, and we believe it's a faithful application of the law, which I think an appeals court will not only uphold, but maybe even strengthen.”
Alderoty said the Ripple lawsuit could provide clarity for other pending lawsuits:
“I think our case and the verdict of our judge will give other judges comfort that the SEC has been misled.”
But he said the question policymakers and lawyers alike should ask is “What is the best regulatory framework that protects the integrity of the market?”
Overall, Alderoty noted that the industry needs a comprehensive regulatory framework, and without it the US would risk losing innovation:
“Without this, I don't think the crypto industry and the technology behind it, the brilliant entrepreneurs who drive it, can truly realize the full potential of this technology in the U.S. and overseas relocations will continue.”
Alderoty also advised other crypto companies:
“Incorporate in a country with a “clear regulatory regime”. Otherwise, you will continue to face the hostility we see in the crypto industry in the US. Until you have a clear, comprehensive regulatory framework in the US, this is probably not a place you would want to start your business. And that's a sad statement.”
*Not investment advice.