How Ripple Received an SEC Settlement Proposal Even Before Court Battle Started

Ripple’s chief legal officer, Stuart Alderoty, recently discussed the U.S. Securities and Exchange Commission’s (SEC) actions against the digital asset XRP on a social media platform. Alderoty on Saturday on social media platform X said that before suing Ripple, the SEC had proposed a settlement that would have labeled XRP as a security, a move that could have significantly altered the digital asset industry.

Alderoty shared, “Before the SEC sued Ripple, Chris and Brad (three years ago today), they offered us the following settlement: the SEC would announce to the market that XRP is a security and the market would be given a short window to ‘come into compliance.’”

However, Ripple declined this offer. According to Alderoty, the reasons were clear: “We said no because: (1) XRP is not a security, and (2) the SEC never built a framework for crypto compliance. No matter the spin that Clayton, Hinman, Gensler or anyone else puts on this case now, it was always about one thing – proving that XRP is not, in and of itself, a security.”

Ripple’s stance was validated when Judge Analisa Torres ruled in July that the automated, open-market sales of XRP were not security offerings, contradicting the SEC’s claims. This decision marked a significant setback for SEC Chair Gary Gensler.

Alderoty commented on this outcome, saying, “Biggest crypto story of 2023: Gary Gensler suffered his ‘worst loss’ when Judge Torres ruled that XRP is not a security… Tokens themselves are not securities. That’s the law of the land.”