Stuart Alderoty, Ripple’s legal adviser, targeted the US Securities and Exchange Commission (SEC).
Referring to the litigation between the SEC and LBRY, Alderoty said the SEC continues to demote the Commodity Futures Trading Commission (CFTC) to the “kid’s table” (a phrase used by colleagues and boss to mean dismissal from activities and duties). According to Alderoty, the regulator pursues an aggressive policy of “regulation by app” approach, attacking places beyond its reach. This limits the CFTC’s powers.
The SEC keeps relegating the CFTC to the kids’ table. That's their regulation by enforcement strategy – attack projects w/ varying resources so they can expand their jurisdiction beyond “securities” by telling judges w/a straight face we’re the government so we must be right. 2/3
— Stuart Alderoty (@s_alderoty) August 3, 2022
Lawyer John Deaton, who attended a hearing in the case between the SEC and LBRY, said the SEC’s claim was “scary”. According to Deaton, the SEC flatly rejected the benefit argument, even though it claimed that some people took LBC tokens to spend. According to the regulator, any token can be classified as a security, even with a small profit expectation.
“I want you to think about this for a minute because it’s too dangerous. This is something that could hijack any asset class.”
Deaton thinks that this definition may even apply to Bitcoin, although SEC Chairman Gary Gensler describes Bitcoin as a “commodity”.
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