Ripple CLO Shares Doc Showing How SEC Labeled XRP a Security

The Ripple Chief Legal Officer Alderoty recently shared a document showing how the SEC labeled XRP as security.

Ripple’s Chief Legal Officer Stuart Alderoty has dismissed claims by critics who argue that the SEC never labeled XRP a security.

In a recent tweet, Alderoty shared a document showing how the Securities and Exchange Commission labeled XRP a security in its complaint against Ripple Labs.

To those saying the SEC doesn’t think a token itself is a security… this is false. See the SEC’s own words in the complaint against us (which the Judge ultimately rejected) pic.twitter.com/RIoAbs1pM5

— Stuart Alderoty (@s_alderoty) August 5, 2023

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The SEC argued that Ripple sold XRP as an investment contract per the document.

“At all relevant times during the offering, XRP was an investment contract and therefore a security subject to the registration requirements of the federal securities laws,” an excerpt read.

Interestingly, Alderoty said Judge Analisa Torres “ultimately rejected” the SEC’s theory.

Alderoty Dismisses Critics’ Claim

Recall that the cryptocurrency community has been commenting on the SEC v. Ripple ruling issued last month. Notably, Judge Torres ruled that XRP itself is not a security.

However, some critics argued that Judge Torres should not have commented on the legal status of XRP, adding that the SEC never labeled the coin a security.

This prompted Alderoty to share a part of the SEC’s complaint, showing how the regulatory agency described the coin as an investment contract.

Pro-XRP Lawyers React

Meanwhile, Alderoty’s tweet stirred reactions among pro-XRP lawyers, who also shared different docs showing the SEC labeling XRP a security.

Attorney Deaton reacted to Alderoty’s tweet and urged critics to read the SEC’s complaint. In the document shared by Deaton, the SEC claimed, “The nature of XRP itself made it the common thread as Ripple, its management, and all other XRP holders.”

Deaton explained that the SEC implied that the “nature of a software code” like XRP is a security.

Those folks need to read the Complaint then.

“The nature of XP itself made it the common thread as Ripple, its management, and all other XRP holders.”

The very nature of software code is a security according to the SEC. And not how it says “ALL XRP holders.” pic.twitter.com/2aGSfQw8Ra

— John E Deaton (@JohnEDeaton1) August 5, 2023

In addition, Attorney Jeremy Hogan backed Alderoty’s comment, saying that the SEC believes that XRP is a security. However, the judge repudiated the SEC’s claim in her ruling.

Like Deaton, Attorney Hogan also shared another doc showing the SEC’s lawyer arguing that XRP remains a security. However, the lawyer argued that the Section 4 provisions of the Securities Act allow individuals to sell the coin without violating federal securities laws.

The SEC absolutely believes that XRP itself is a security. And Judge Torres clearly repudiated that belief in her ruling.

Here’s the transcript from the 2021 hearing. The SEC lawyer argues that XRP remains a security, but that there’s an exemption for individuals to sell. https://t.co/cd3KQz6dVn pic.twitter.com/gNR8vOw567

— Jeremy Hogan (@attorneyjeremy1) August 6, 2023

Alderoty Slams a16z Crypto GC

Meanwhile, Ripple’s CLO slammed Miles Jennings, the General Counsel at a16z Crypto, for defending the SEC. This happened after Jennings pointed out that the SEC clearly stated that XRP was an investment contract “during the offering.”

“So yes, in all sales, they were saying it was an investment contract,” said Jennings.

In response, the Ripple CLO said the offering lasted seven years, from 2013 to 2020. He added that the SEC, in its filings, told the court that XRP itself represents the investment contract.

Alderoty said he was not surprised by Jennings’ attempt to “rewrite history,” given that he wrongfully predicted that Ripple would lose against the SEC.