Ripple‘s Chief Legal Officer Speaks Out on Crypto Regulation
Stuart Alderoty, Ripple‘s Chief Legal Officer, raised a pertinent issue following the recent settlement between Binance and the Department of Justice (DOJ). His comments shed light on the regulation of crypto in the US.
Crypto Tokens and Securities
In a post on his X (formerly Twitter) platform, Alderoty questioned the stance of the Securities and Exchange Commission (SEC) on crypto tokens. The DOJ’s charges against Binance did not mention any violations of securities laws, nor did they refer to crypto tokens as securities on the exchange. Alderoty argued that this contradicts the SEC’s crackdown on crypto exchanges offering “unregistered securities.”
The DOJ’s case against Binance and its former CEO, Changpeng “CZ” Zhao, only involved violations related to the Bank Secrecy Act (BSA), failure to register as a money-transmitting business, and the International Emergency Economic Powers Act (IEEPA). Alderoty pointed out that the SEC’s term “crypto asset securities” was not mentioned in the DOJ case, indicating that it holds no meaning under the law.
Binance Still Faces Challenges
While the resolution with the DOJ has been reached, Binance still has to contend with the civil suit instituted by the SEC in June. The SEC alleges that Binance was operating as an unregistered securities exchange, mishandling customer funds, and lying to regulators and investors. The resolution with the DOJ included a fine of over $4 billion, one of the largest compliance fines in history, with the possibility of more fines depending on the outcome of the SEC’s case.
Implications for the Crypto Industry
Alderoty commended the DOJ’s action against Binance, emphasizing the importance of getting the crypto industry to comply with laws and safeguards. He suggested that the industry would face a similar trajectory as big banks did in the past. However, the absence of the SEC from the coordinated efforts between the DOJ, FinCEN, OFAC, and CFTC suggests that Binance‘s legal challenges are far from over.
Binance‘s settlement with the DOJ is a significant development in the regulatory landscape of the crypto industry. Alderoty’s insights highlight the complexities and implications for crypto exchanges in complying with the evolving regulatory framework. As the legal battles continue, the crypto industry stands at a pivotal point in its journey towards regulatory compliance and legitimacy in the eyes of the law and investors.
### News source: bitcoinist.com