Is The SEC To Blame For BlockFi’s Bankruptcy? Ripple’s Alderoty Reveals All!

Stu Alderoty, who has been General Counsel for Ripple for almost 4 years, has often spoken out and clarified popular misconceptions surrounding Ripple Vs. SEC case. Most recently, he corrected the New York Times article titled “Inside a Crypto Nemesis’ Campaign to Rein In the Industry” after the comments made in the article concerning the feud didn’t sit well with him. 

Alderoty And The SEC: A Bitter Relationship

Alderoty has been well known for constantly criticizing the SEC under Gary Gensler’s leadership as the federal agency’s chairman. He claims that the SEC has neither labeled XRP as security nor does it have the power to do so. Only the court may determine if XRP is a security, and only the court can respond to the Securities and Exchange Commission’s inquiry.

In addition, he emphasizes that the SEC is more committed to defending its territory than upholding its responsibility to safeguard investors. The SEC’s legal action against Ripple was described by Alderoty as a “rug pull against investors.” 

BlockFi’s Insolvency: What Is The SEC’s Role?

According to reports, BlockFi, a crypto lender, has declared bankruptcy as a result of its significant exposure to FTX. However, Ripple Counsel has indicated some grave concerns over the affiliation between the two businesses and its SEC settlement in the United States. 

In his opinion, nothing was ever “registered” under the agreement. He questioned if the first two payments of the $100 million in fines had been made. The SEC has been contacted by the Ripple General Counsel to request proof of BlockFi’s financial stability and ability to make payments.

FTX discloses a $250 million loan to the cryptocurrency lending platform. Consumer money, on the other hand, has been frozen. All this brings up the issue of whether BlockFi paid the fine and whether some of the money used to pay the fee came from FTX. 

According to Alderoty, the SEC forces most companies to settle through its tortured enforcement process, which acts as a punishment.

BlockFi is an example of a cryptocurrency company that the SEC coerced into a settlement, according to the general counsel for Ripple. Earlier this year, BlockFi was asked to pay $100 million to the SEC in order to resolve allegations that its interest accounts had violated U.S. securities laws. The cryptocurrency lender, however, was unable to pay the punishment at the time, which caused BlockFi to be rescued by FTX’s Bankman Fried.