Ripple's Stance on SEC's Regulatory Actions

Ripple executives have not held back their discontent with the SEC's regulatory approach, especially in light of the recent amendment to the complaint against Binance.

The amended complaint lists Third Party Crypto Asset Securities, including SOL, ADA, and SAND. This move follows the SEC's lawsuit against Binance Holdings and its former CEO, Changpeng Zhao, alleging various violations, such as misleading customers and operating as an unregistered exchange.

Stuart Alderoty, Ripple's Chief Legal Officer, criticized the SEC's inconsistency on X (formerly Twitter). He pinpointed the contradiction in the agency's regulatory stance.

He pointed out that while the SEC retracted its claims that ten tokens on Binance are securities, it maintained them as securities in its case against Coinbase.

"When a judge signals B.S. on the SEC's claim that ten tokens on Binance are securities, the SEC says, 'Never mind,'" Alderoty posted. But these tokens are left out to dry in the Coinbase suit. This isn't how to regulate."

Ripple CEO Brad Garlinghouse joined in, denouncing the amended Binance complaint as hypocrisy. He argued that SEC Chair Gary Gensler's statements about clear rules contrast sharply with the agency's inconsistent enforcement.

"Chair Gensler testifies the rules are clear, yet his SEC can't figure them out and applies them haphazardly, festering more industry confusion," Garlinghouse tweeted.

A Potential End to the "Un-ending Security War" from SEC

The SEC's recent actions affected various firms and caused a last-minute commotion within the market.

Justin Slaughter, policy director at Paradigm, suggested that the SEC's retreat in the Binance case could be a strategic move to avoid further unfavorable rulings.

He noted that the judge in the Binance case indicated a likely finding that the tokens were not securities, prompting the SEC to adjust its stance.

"So rather than take another bad loss on the beware of their approach, they're backing down," Slaughter said. However, he emphasized that this retreat seems limited to the Binance case, with no similar indications in the ongoing Coinbase case.

Last year, the agency sued Coinbase for operating as an unregistered exchange, broker, and clearing agency, including claims that numerous cryptocurrencies, such as SOL, ADA, and MATIC, are securities.

Ripple's executives argue that the SEC's inconsistent and unclear regulatory framework hampers the industry's growth and creates confusion.

Garlinghouse's critique can be seen as the broader industry concern that the SEC's approach lacks transparency and consistency, particularly under Chair Gensler, which the community detests.

The SEC's intention to amend its complaint against Binance could provide a brief respite for investors in Solana, Cardano, Polygon, etc.

The amendment motion is due within 30 days of the court's scheduling order. Notably, the statement did not mention Ripple, which remains embroiled in a legal dispute with the SEC over accusations of selling unregistered securities.