Ripple’s Legal Chief Calls for SEC Reform and Clearer Crypto Regulations

Ripple’s Chief Legal Officer, Stuart Alderoty, has called for substantial reforms at the U.S. Securities and Exchange Commission (SEC), urging the next chairman to reset the agency’s fraught relationship with the cryptocurrency sector.

His recommendations include halting all non-fraud-related crypto lawsuits, effectively putting an end to the SEC’s lengthy legal dispute with Ripple over the classification of XRP as a security. This battle, which began in 2020, has already seen Ripple fined $125 million after a federal court ruled that XRP sales to institutions violated securities laws, though the court cleared sales on public exchanges.

The SEC has since appealed the decision, which Alderoty called “disappointing but not surprising,” further criticizing the SEC for what he described as a “complete embarrassment.”

Alderoty also highlighted the importance of having balanced leadership at the SEC, particularly supporting Commissioners Hester Peirce and Mark Uyeda, both of whom have been vocal critics of the SEC’s crypto enforcement strategy.

Peirce, known as “Crypto Mom” for her pro-crypto stance, has not been expected to take a senior role at the SEC, with sources joking about her post-agency plans. Uyeda, who has similarly criticized the SEC’s approach, has expressed a desire to lead the agency and has labeled the current enforcement-heavy crypto regulation as a “disaster.”

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In addition, Alderoty called for the SEC to work alongside Congress and other financial regulators to establish clear, unified rules for the cryptocurrency industry. He suggested that the SEC should step back from its assumption of primary jurisdiction over the space and work toward a more collaborative regulatory framework that encourages innovation. The current SEC stance, particularly under the leadership of Gary Gensler, has faced significant pushback from the crypto industry, which argues that the lack of clear regulatory guidelines has hindered progress and left businesses vulnerable to enforcement actions.

Kosta Gushterov