As the legal battle between Ripple Labs and the SEC draws to a close, Ripple deals another blow to the SEC. November 30 and December 5 can therefore lead to a possible settlement due to the good starting position of Ripple Labs.
Not impressed with the numbers
Ripple’s attorney continues to confront the SEC, harshly criticizing its watchdog enforcement policies against the crypto industry.
Attorney Stuart Alderoty addressed the SEC’s recently released annual report in which the agency praised itself. The report shows that the commission has taken 760 enforcement actions this year, an increase of nine percent compared to last year.
A record $6.4 billion in fines and restitution was imposed, according to the SEC. This is the highest amount in SEC history and an increase from $3.852 billion in fiscal 2021. SEC Chairman Gary Gensler was very proud of this. He said:
I am still impressed with our Enforcement Department. However, these numbers only tell part of the story. What remains the same is the dedication of the staff to follow the facts.
—Gary Gensler
Ripple’s lawyer was less than impressed by the numbers, accusing The SEC of bearing much of the responsibility for BlockFi’s demise. In addition, Alderory alleged that the SEC engaged in unethical practices. The SEC shouldn’t be proud of handing out so many fines.
BlockFi agreed to a settlement agreement with the SEC in February after the SEC accused the company of failing to register its retail crypto lending product.
Ripple Attacks SEC Over BlockFi Deal
In the first week of November, BlockFi paused customer withdrawals. The lending platform took down a $400 million line of credit from FTX US over the summer and was one of the first victims when the exchange went bankrupt.
Alderoty wrote on Twitter that nothing was ever “registered” under the BlockFi/SEC agreement.
As Ripple’s lawyer goes on to explain, the SEC is marketing the deal as a win for small investors because they are protected.
Australian lawyer Bill Morgan replied to Alderoty via Twitter. He said that the crypto assets of FTX/BlockFi investors, which the SEC is supposed to protect, were used and that the SEC received stolen money.
Is receiving stolen money a crime?
—Bill Morgan
Ripple’s CTO, David Schwartz, noted that it’s “even worse.” Schwartz said the fact that BlockFi borrowed money from FTX to pay fines could have something to do with BlockFi’s assets being stored at FTX.
In other words, the SEC may have so weakened BlockFi financially that the company had no choice but to store cryptocurrencies at FTX to keep it running, which may have been the reason for the collapse.
— Schwartz
