coinedition.com
Stuart Alderoty, the defense lawyer for Ripple in the case of the Securities and Exchange Commission (SEC) versus XRP, said an investigation into Sam Bankman-Fried and FTX is entirely necessary given the fallout.
Lawyer Alderoty added that the probe should benefit the regular consumer, not the type playing out in the SEC vs. XRP case due to the absence of regulatory clarity in the US.
Calls for investigations into SBF and FTX are entirely warranted given the fallout. However, that investigation shouldn’t obscure the market havoc (and consumer harm) the SEC continues to create in the absence of regulatory clarity in the U.S.
— Stuart Alderoty (@s_alderoty) November 14, 2022
The defense lawyer argued that the SEC’s approach to regulation over the years had been by enforcement. He claimed the regulator merely sues people after they launch a project without letting them know the rules in advance. In his words:
Regulation by enforcement has been the SEC’s go-to. The tortured enforcement process is the punishment, which is why most settle. With settlement in hand, the SEC then pretends it has lawful jurisdiction.
Interestingly, the Ripple blockchain and the SEC have been in a multi-year legal battle. On December 22, 2020, the regulator filed an action against Ripple Labs Inc. and two of its executives, who were also significant security holders, alleging that they raised over $1.3 billion through an unregistered digital asset securities offering.
For many months, the content of the SEC’s former director’s speech had been a point of contention in the legal tussle. The US commission made multiple attempts to prevent them from being used to support Ripple’s Fair Notice Defense. However, the court has set March 31, 2023, as the day for a final hearing.