Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has emphasized that combating crypto fraud doesn’t necessarily need to become politicized by authorities.
In light of the recent sentencing of Irina Dilkinska, former Head of Legal and Compliance at OneCoin, to four years in prison for her involvement in a crypto pyramid scheme that defrauded investors of over $4 billion, Alderoty addressed what he perceives as shortcomings in handling crypto-related cases by authorities.
Alderoty appears to be referring to public perceptions of the United States Securities and Exchange Commission (SEC) engaging in political maneuvering within the crypto industry. This sentiment arose following statements made by SEC Director Gurbir Grewal, who defended the commission’s approach to crypto regulation, asserting its integrity and denying accusations of regulation through enforcement.
Alderoty critiqued Grewal’s statement, citing instances where federal courts criticized the SEC for not acting in good faith. One such example is the Debt Box case, where the SEC accused the company of defrauding investors of over $50 million, leading to a restraining order and asset freeze against Debt Box. Eventually, the SEC admitted to presenting false statements in court, causing detrimental impacts on Debt Box’s operations.
John E. Deaton, the lawyer representing XRP, voiced concerns about potential government overreach in the Debt Box case.
Alderoty also referenced how a district judge rebuked the SEC for its lack of allegiance to the law in the Ripple lawsuit. Moreover, in the SEC’s lawsuit against Grayscale Investments, the court criticized the SEC’s arbitrary and capricious actions. Alderoty highlighted inconsistencies in the SEC’s guidance on crypto as well.
Similar actions from the SEC in 2023, including enforcement actions against cryptocurrency exchanges like Binance, Coinbase, and Kraken, have sparked concerns. In response, many Ripple supporters advocate for the introduction of new laws to prevent what they perceive as vindictive charges by regulatory authorities.
