Stuart Alderoty explained how the US Securities regulatory body is wrong over the “common enterprise” argument in the XRP lawsuit.
Ripple is a blockchain firm, known for providing global payment solutions with the help of XRP Ledger (XRPL)’s XRP coin. Since Dec 2020, Ripple is facing huge legal hurdles in the US because of a lawsuit, initiated by the United States Securities and Exchange Commission (SEC) over the nature of the XRP coin & Ripple’s business.
On 13 May 2023, Ripple chief legal officer Stuart Alderoty pointed out a case of 1946 where the US SEC body failed to prove the “common enterprise” argument in the court against the defendant entity.
According to the Ripple officer, the SEC body was wrong and also wrong in the XRP lawsuit.
On 14 May, Ripple’s legal officer pointed out another lawsuit in which the SEC body failed to prove the “common enterprise” argument in court.
According to Alderoty, Without a “common enterprise,” it does not matter whether “the fortunes of investors” are tied to the efforts of others and also added that the Howey Test is also not applicable to the XRP coin.
Ripple vs SEC
Through the XRP Lawsuit, the SEC body alleged that the XRP coin is a security & that should be registered with the corresponding regulatory body.
Also, the SEC body charged the Ripple labs & Ripple’s top executives over the sale of more than $1.2 billion worth of unregistered securities publicly.
Recently Ripple CEO Brad Garlinghouse said that the lawsuit is very near to its end and the final judgement will come before Q3 of this year.