As a seasoned researcher with years of experience delving into the complexities of financial markets and regulatory landscapes, I find myself intrigued by this ongoing saga between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). The legal battle over the classification of XRP as a security or not seems to be far from over, with both parties continuing to file appeals.
The feud continues: Ripple Labs has announced plans to file a cross-appeal in its ongoing legal case with the U.S. Securities and Exchange Commission.
Ripple’s action aims to safeguard its legal arguments, as the Securities and Exchange Commission’s (SEC) appeal against the July 2023 decision that deemed XRP not to be a security is processed by the courts.
The SEC’s decision to challenge the court ruling is based on the finding that Ripple’s transactions involving XRP on trading platforms did not breach U.S. securities regulations.
In a tweet, Brad Garlinghouse (Ripple’s CEO) expressed excitement about the cross-appeal, stating that it could help determine the Securities and Exchange Commission’s (SEC) future and potentially halt their strategy of enforcing regulations.
Previously mentioned this month, if Gensler and the SEC were truly committed to upholding legal principles, they would acknowledge their defeat and progress forward. However, it appears that they prioritize neither adherence to law nor offering clear guidance to American industry participants. Under Chair Gensler’s leadership, the agency seems more focused on…
— Brad Garlinghouse (@bgarlinghouse) October 10, 2024
In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, alleging that their digital currency, XRP, was illegally offered for sale without proper registration as a security. Essentially, securities are financial products like stocks or bonds that must pass through stringent regulatory checks before they can be sold to the public. The central point of contention in this legal battle is whether XRP fits the definition of a security under the SEC’s regulations.
Through its broad-spectrum approach in legal proceedings, Ripple is able to tackle every facet of the case as the judicial process unfolds. As stated by Ripple’s Chief Legal Officer, Stuart Alderoty, the company aims to maintain flexibility in their strategies.
Regardless of my personal viewpoints on the SEC’s debatable definition of a token as a security, or their recent appeals, I find myself in a situation where I must comply with these regulations.
Originally, the SEC failed on all crucial aspects of the case, leading them to file an appeal. In response, Ripple has now submitted a counter-appeal to make sure no points are overlooked, particularly the assertion that for something to be considered an “investment contract,” it must include essential rights and responsibilities similar to those found in a traditional contract.
— Stuart Alderoty (@s_alderoty) October 10, 2024
As a crypto investor, I understand that in cases like this one between Ripple and the Securities and Exchange Commission (SEC), both parties will file notices detailing the foundation of their arguments, followed by more comprehensive legal documents. In the upcoming weeks, Ripple will submit these detailed briefs as the appeal moves forward. Both Ripple and the SEC will be clarifying their positions during this period.
The ongoing battle
Previously noted, Ripple Labs faced a lawsuit in 2020 from the Securities and Exchange Commission (SEC). The lawsuit claimed that Ripple had illegally offered unregistered securities by selling XRP. According to the SEC, XRP falls under U.S. law as a security, and they accused Ripple and its top officials of raising approximately $1.3 billion in funds without proper registration.
Ripple argued that XRP does not meet the criteria for a security under the Howey Test.
In the course of the case, Ripple managed to reach significant accomplishments like the decision made by Judge Sarah Netburn in March 2021 that set apart XRP from both Bitcoin (BTC) and Ethereum (ETH). This ruling recognized the functional value and currency-like nature of XRP.
In addition, the court mandated that essential records be made public, encompassing key correspondence exchanged within the Securities and Exchange Commission (SEC) by its former director, William Hinman. His remarks regarding Ethereum’s classification as a non-security were pivotal in shaping the case.
In a landmark decision on July 13, 2023, Judge Analisa Torres declared that when XRP is traded on public exchanges, it does not qualify as a security. This ruling represents a major triumph for Ripple and the expansive crypto sector at large.
In a ruling, the court determined that Ripple’s XRP transactions with institutional investors infringed upon securities regulations. The legal disputes surrounding Ripple persisted, with the Securities and Exchange Commission seeking to overturn this decision, but their appeal was dismissed in October 2023.
In the end, Ripple was penalized with a hefty sum of $125 million. Yet, this decision served as a significant milestone in the evolution of cryptocurrency regulation, establishing a new standard for how digital assets will be categorized within the U.S. in the future.
Read More
Sorry. No data so far.
2024-10-10 20:34