Ripple’s Legal Head Announces SEC XRP Settlement Offer Ahead of 2020 Lawsuit

Ripple's Chief Legal Officer Stuart Alderotti announced the content of the proposed settlement to the US Securities and Exchange Commission (SEC) ahead of the agency's December 2020 filing against the company.

Looking back on the third year of the lawsuit, Alderoty cited the terms of the settlement proposed by the SEC before the case was filed. Before he sues Ripple, the SEC proposed a settlement: officially declaring XRP (XRP) a security and allowing the market to “come into compliance” for a short period of time.

On December 22, 2020, the SEC accused Ripple's founder, Christian Larson, and CEO Bradley Garlinghouse of offering an unregistered digital asset security to raise more than $1.3 billion.

According to Alderotti's post, in 2020, the SEC asked Ripple to publicly recognize XRP as a security asset and allowed a short window for crypto compliance. Ripple resisted the SEC's demand, maintaining that XRP is not a security. Additionally, he argued that the SEC has failed to establish a regulatory framework for crypto compliance.

Alderoty clarified that the SEC has not issued clear rules for crypto compliance. Despite industry criticism and companies relocating, the US regulatory body, three years after the XRP-post-XRP lawsuit, has yet to establish proper industry compliance. Instead, it has followed an enforcement-first strategy by launching legal actions against major crypto exchanges such as Coinbase and Binance.

Alderoty said that despite the different views, the main focus of the case was to show that XRP is not a security in itself.

US crypto businesses have argued that current securities laws are not appropriate for crypto assets, but the SEC has made little progress in establishing a specific regulatory framework for crypto.

Judge Analisa Torres, in a July 2023 summary judgment, ruled that XRP is not a security against retail transactions.

In October, Cointelegraph reported that the SEC dropped charges against Garlinghouse and Larson.

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