SEC Offered to Declare XRP a Security Three Years Ago, Ripple CLO Reveals

In a bombshell revelation, Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has disclosed that the U.S. Securities and Exchange Commission (SEC) offered the company a controversial settlement in 2020, three years before filing its lawsuit against Ripple. The proposed deal involved the SEC publicly declaring XRP a security and providing a brief grace period for market participants to “come into compliance.”

Before the SEC sued Ripple, Chris and Brad (3 yrs ago today) they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to “come into compliance.” We said no because: (1) XRP is not a…
— Stuart Alderoty (@s_alderoty) December 22, 2023

This disclosure casts new light on the ongoing legal battle between Ripple and the SEC, which has gripped the cryptocurrency community since 2020. The SEC alleges that XRP, Ripple’s flagship digital asset, is an unregistered security, while Ripple contends that it is a utility token and not subject to securities laws.

According to Alderoty, Ripple rejected the SEC’s offer for two primary reasons:

XRP is not a security: Ripple maintains that XRP’s functionality and lack of investment contract characteristics clearly distinguish it from securities. Accepting the SEC’s offer would have contradicted this core belief.
Lack of regulatory clarity: At the time of the offer, the SEC had not established a clear framework for cryptocurrency compliance. Accepting the deal would have meant operating under ambiguous regulations, creating uncertainty for Ripple and the broader crypto industry.

Alderoty’s revelation suggests that Ripple, from the outset, aimed to definitively establish XRP’s legal status through the courts rather than succumb to regulatory pressure. This strategy, while risky, reflects the company’s strong conviction in XRP’s utility and its desire for regulatory clarity for the entire cryptocurrency sector.

Also Read: XRP: Bullish Surge Sparks Speculation – Can Ripple (XRP) Hit $1 in 2024?

The news of the SEC’s settlement offer has sent shockwaves through the crypto community, sparking renewed debate about XRP’s regulatory status and the SEC’s approach to digital assets. It remains to be seen how this revelation will impact the ongoing lawsuit and the broader regulatory landscape for cryptocurrencies.

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Joe M

I’m the cryptocurrency guy who loves breaking down blockchain complexity into bite-sized nuggets anyone can digest. After spending 5+ years analyzing this space, I’ve got a knack for disentangling crypto conundrums and financial markets.

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