Ripple CLO Stuart Alderoty has recently shared his thoughts on the latest stance taken by the United States Securities and Exchange Commission (SEC) regarding meme coins. In agreement with the market regulator, Alderoty emphasized that meme coins should not be classified as securities. He praised the simplicity of the guidance provided by the SEC, stating that it focuses on whether something falls under the commission’s jurisdiction rather than determining its legality.
According to Alderoty, the key question for the SEC is jurisdictional rather than a matter of legality. He highlighted that in the event of fraud involving meme coins, other agencies would be responsible for taking action, not the SEC. The legal expert commended the SEC for sticking to established laws and precedents in its guidance, avoiding vague categorizations such as “decentralization.”
Supporting the SEC’s position, Alderoty explained that meme coins do not qualify as securities because they do not offer rights to income, profits, or assets. He clarified that the value of meme coins is derived from market sentiment rather than managerial efforts. Drawing parallels to Ripple Labs’ ongoing lawsuit with the SEC, Alderoty reiterated that without investment in a common enterprise, there is no investment contract. He concluded by emphasizing that understanding crypto securities terms does not need to be complex.
The recent regulatory changes within the U.S. SEC, particularly since Mark Uyeda assumed the role of acting chairman, have brought about positive shifts in the crypto industry. The guidance provided on meme coins reflects these changes, signaling a more favorable regulatory environment. Several high-profile investigations and lawsuits initiated during the previous administration led by Gary Gensler have been resolved, including the lawsuit involving Coinbase, which was officially dropped on Feb. 27.
Amidst these developments, industry experts anticipate that the Ripple lawsuit may also see a favorable resolution from the SEC, despite being at the appeal stage. The overall trend towards more transparent and clear regulatory policies in the crypto space bodes well for market participants and investors alike.