Here’s Why Ripple Is Urging Gensler To Withdraw From Crypto Cases
The ongoing legal disagreement between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has yet to be decided after the respective sides submitted their last briefs around a month ago. Recently, Forbes journalist Dr. Roslyn Layton sought to intervene by filing a motion to access the Hinman speech documents.
Meanwhile, Chief Legal Officer for Ripple, Stuart Alderoty, has been critical of the SEC recently, declaring 14 days ago that Gary Gensler, SEC chairman, is a political liability for neglecting to organize adequate rules for the 40 million Americans possessing cryptocurrencies.
Ripple CLO Demands Withdrawal
In his most recent tweet, Alderoty highlights a potential problem with Gary Gensler’s behavior which could result in his downfall. He states that Gensler has declared that all cryptocurrencies besides Bitcoin are unregistered securities — a statement that could come back to haunt him.
He may be obligated to recuse himself from voting on any enforcement cases that involve this matter, in line with the verdict in Antoniu v. SEC (8th Cir. 1989). Alderoty’s tweet referenced Gensler’s interview in a New York Magazine, where Gensler classified “everything except Bitcoin” as security.
However, Alderoty pointed out that Gensler may have made an error in making such a statement, citing the case of Antoniu v. SEC. Consequently, the SEC barred a stockbroker from employment with a firm for violating federal securities laws, initiating proceedings for the stockbroker to be permanently banned from all employment in the securities field.
But the SEC commissioner at the time committed an error in judgment when the court later ruled. The court declared that, when the case was being considered, the Commissioner had wrongly declared the ban permanent.
The court determined that the Commissioner’s decision to deny the stockbroker permanent employment while the case was still in progress demonstrated that the Commissioner had already come to a judgment. By continuing to be involved in the disqualification process, the Commissioner infringed on the right to due process.
Hence, Alderoty argues that Gensler’s recent statement has disqualified him from being involved in any decision regarding a crypto-related securities case. According to the Ripple CLO, Gensler must abstain from voting on an enforcement case as he has already expressed his opinion.
Another Battleground Emerges for the SEC
The U.S. Security Exchange Commission is confronting a new challenge following a new legal battle with an XRP society solicitor. Fred Rispoli of Hodl Law filed a lawsuit against the SEC two months ago, requesting the court to determine that Ether and the Ethereum network are not securities.
Remarkably, the SEC has filed a motion to dismiss the lawsuit and, in the filing, has made the remarkable claim that, according to Hodl Law’s allegations, the SEC still needs to come to a definitive conclusion regarding the Ethereum network and Ether.
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