Stuart Alderoty, chief legal officer at Ripple, recently took to the X social media platform to react to Consensys’s recent lawsuit against the U.S. Securities and Exchange Commission. He said that his take from 2022 “aged well.”
A limitless jurisdiction?
As reported by U.Today, the Ethereum backer railed against the regulator’s efforts to expand its jurisdiction by classifying the leading altcoin as a security.
Consensys argues that the SEC is hurting developers and market participants while hindering innovation with its hostile approach to cryptocurrencies.
Back in May 2022, Alderoty said labeling every token besides Bitcoin as a security is “a combination of bad law and bad policy all in the name of the SEC’s political land grab over this asset class.” He added that the regulator’s jurisdiction was not limitless.
We all agree that consumer and market protections are needed. But saying that every token besides BTC (maybe) is a security is a combination of bad law and bad policy all in the name of the SEC’s political land grab over this asset class. The SEC’s jurisdiction is not limitless. https://t.co/PdBtltgsxG
— Stuart Alderoty (@s_alderoty) May 24, 2022
From “friends” to foes?
On Apr. 10, the SEC staff sent a “Wells Notice” to Consensys, signaling its intention to bring an enforcement action against the company. The regulator also informed Consensys that the popular Metamask wallet was violating the securities laws by acting as an unregistered broker-dealer.
Consensys has hired attorneys from Watchtell to fight against the regulator, following Coinbase’s footsteps. The Manhattan-based firm is generally known as one of the best litigators in the world, meaning that Consensys certainly did not “cheap out.”
Notably, Consensys boss Joseph Lubin said that they were “big friends and fans” of the SEC. “I think they really understand this space well…We believe they get it…They consider the Ethereum network token and the issuance mechanism to be decentralized, and therefore no transactions involving those particular assets are considered to be transactions of securities.”
