Ripple CLO Draws on Judge’s Criticism of SEC’s “Vague” Rules

A recent court case involving the SEC has exposed a lack of clear regulations surrounding cryptocurrencies in the US.

Stuart Alderoty in the center looks smug as Brad Garlinghouse looking at him proudly and Gary Gensler appears to be furious.
Created by Gabor Kovacs from DailyCoin
  • A U.S. Judge has criticized the vagueness of SEC crypto regulations in a lawsuit case that isn’t Ripple’s.
  • Ripple Labs has argued that the SEC has used enforcement actions as an example rather than setting guidelines.
  • Unclear SEC regulations have created uncertainty for cryptocurrency businesses.

A recent court case has shed light on the murky regulatory landscape surrounding cryptocurrencies in the United States. The Securities and Exchange Commission (SEC), the primary financial regulator, has been criticized for its lack of clear-cut rules, creating uncertainty for companies operating in the crypto space.

Judge Calls SEC Regulations “Loosey-goosey”

This issue came to light after Stuart Alderoty, Chief Legal Officer at Ripple Labs, a prominent blockchain company, shared excerpts from a court transcript on social media. The transcript involved the National Center for Public Policy Research (NCPPR) challenging an SEC ruling. 

In the case, the judge presiding over the case remarked that the SEC’s regulations were “so vague and loosey-goosey that nobody knows whether they will be at risk from not asking.” This lack of clarity is particularly concerning for the crypto industry, which has faced increased scrutiny from the SEC in recent years. 


The SEC has ramped up enforcement actions without providing clear guidelines on how companies should operate. Alderoty pointed out the irony in the NCPPR case, noting that it did not involve a crypto firm, yet it highlighted the same arbitrary nature of SEC actions that the crypto industry experiences.

Alderoty contends that the SEC’s strategy aims to use Ripple as an example, rather than providing clear guidelines for the entire industry. This lack of clarity has also forced courts to rely heavily on past rulings when dealing with crypto-related matters.

SEC Accused of Misconduct

Beyond the issue of unclear regulations, the SEC has also faced accusations of misconduct in its pursuit of enforcement actions.  Alderoty cited instances where the SEC allegedly failed to disclose relevant information in court filings and potentially misrepresented facts in other cases. These accusations highlight a growing concern within the industry regarding the SEC’s tactics.


Calls for reform are mounting and industry leaders have urged for the SEC to be held accountable for its actions. Additionally, there is a growing consensus that Congress needs to intervene and establish clear, crypto-friendly regulations to prevent the SEC from operating with such discretion.

On the Flipside

  • The SEC have argued their enforcement actions, even if seen as unclear, deter bad actors and protect investors from fraudulent practices within the crypto space.
  • Even with industry pressure, achieving consensus on crypto regulation in a politically divided Congress could be a slow and cumbersome process.

Why This Matters

A seemingly unrelated court case underscores the ongoing issue of unclear cryptocurrency regulations in the US, raising concerns about the SEC’s approach to enforcement and its impact on the entire crypto industry.

To learn more about the regulatory hurdles surrounding Ethereum ETFs, read here:

Are Ethereum ETFs Being Hamstrung by SEC’s Securities Claim?

To learn more about Ripple’s XRP escrow and how it may affect the price of XRP, read here:

Ripple’s Escrow: Is It XRP’s Double-Edged Sword?

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.