Ripple CLO Says SEC Can’t Change XRP Non-Security Status Even If It Appeals

Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, insists that even if the SEC appeals, the non-security status of XRP and Judge Analisa Torres’ decision regarding secondary market sales of XRP will remain unchanged. Alderoty expressed this view during an interview with law professor J.W. Verret on Crypto Law TV. He emphasized that Judge Torres’ rulings, which stated that XRP is not a security and that trading XRP on the secondary market does not involve investment contracts, are currently the governing law. Alderoty is confident that the Second Circuit cannot overturn this decision, as the circuit rarely reverses lower courts’ rulings, with reversals occurring less than 10% of the time. He believes the SEC will not succeed in overturning the court’s decision due to the careful handling of the case by Judge Torres. Alderoty also stated that the SEC would have little chance of prevailing if it challenges Judge Torres’ ruling on XRP’s non-security status in the Supreme Court. In response to Verret’s question about the SEC appealing the case, Alderoty expressed his skepticism about the SEC’s rationality but advised against appealing, as the case does not align with the SEC’s core mission of investor protection. He also criticized the SEC for engaging in litigation gamesmanship instead of faithfully applying the law. Alderoty believes that the SEC’s litigation tactics have been unproductive and that its theories will continue to be rejected by courts of appeal and ultimately the Supreme Court. The SEC previously attempted to file an interlocutory appeal challenging the summary judgment decision in the case but did not contest Judge Torres’ ruling on XRP’s non-security status. The court denied the SEC’s interlocutory appeal request, leaving it uncertain if the SEC will attempt to overturn the court’s declaration that XRP is not a security in any future appeal.