In a surprising turn of events following the recent SEC v. Coinbase, Ripple’s legal director Stuart Alderoty took to social media to expose what he claims is serious misconduct by the regulator. While he did not speak in the courtroom, Alderoty’s post adds a new layer of intrigue to the already high-stakes legal battle.
In a surprising turn of events following the recent SEC v. Coinbase, Ripple’s legal director Stuart Alderoty took to social media to expose what he claims is serious misconduct by the regulator. While he did not speak in the courtroom, Alderoty’s post adds a new layer of intrigue to the already high-stakes legal battle.
The central issue revolves around the SEC’s allegations that Coinbase sold unregistered securities, an allegation vehemently contested by the cryptocurrency exchange.
However, Alderoty’s post questions the SEC’s narrative, stating that its focus on whether investors are “bundling [their] capital with the promoter’s efforts” is fundamentally flawed. Citing the influential Revak case, Alderoty argues that the Howey test requires more than a mere investment in effort; it requires an investment in a common enterprise.
Whats Next?
The recent hearing, a focal point not only for the cryptocurrency market but for the entire financial world, saw probing questions from Judge Failla. In particular, he questioned the SEC about tokens like Solana (SOL) and Cardano (ADA) mentioned in the complaint, questioning whether they violated securities laws. The agency’s lawyer defended these tokens as simple computer codes, prompting a wry smile from Judge Failla.
With the next phase of the legal battle seeing Coinbase being questioned by Judge Failla, the exchange faces the likelihood that the judge will deny its motion, moving the case into the discovery phase. After discovery, both the SEC and Coinbase retain the option to file a motion for summary judgment.