Former CFTC Chair Predicts SEC Will Drop Ripple Case

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As a seasoned researcher with extensive experience in the financial industry and a particular interest in digital assets, I find myself intrigued by the latest developments in the Ripple-SEC saga. The potential resolution of this lengthy legal battle under new leadership at the SEC is not just a hope for investors, but a breath of fresh air for the entire crypto community.

As a researcher, I foresee a potential resolution in the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), as per the predictions made by former Commodity Futures Trading Commission (CFTC) Chair Chris Giancarlo.

The former CFTC Chair is known as “Crypto Dad,” thanks to his progressive views on digital assets. 

Ripple’s Fight Against The SEC Coming To An End?

The ongoing legal dispute between Ripple and the Securities and Exchange Commission has seen a shift following Gary Gensler’s resignation announcement. There’s been a rise in speculation that the case might be entirely dropped with new leadership taking over. This lawsuit, initiated in December 2020, alleges that Ripple and its executives illegally raised $1.3 billion by offering unregistered securities through the sale of XRP, their native cryptocurrency. However, optimism for a resolution has resurfaced following Donald Trump’s presidential victory, as he had pledged to dismiss Gensler on his first day in office. This development has resulted in a significant increase in the price of XRP, with many believing that the legal battle may be resolved under Gensler’s successor.

Previously, Chris Giancarlo, who was once the head of the Commodity Futures Trading Commission (CFTC), expressed his opinion that the U.S. Securities and Exchange Commission (SEC) might abandon its legal action against Ripple during the Trump administration.

“In my opinion, it would be wise for regulatory bodies to discontinue cases they have already lost. Specifically, I believe they should abandon the XRP case. In fact, I am confident they would benefit from doing so.

Previously, the ex-Chair of the Commodity Futures Trading Commission (CFTC) expressed the opinion that XRP shouldn’t be considered a security. This stance is consistent with Judge Torres’ decision in July 2023, which concluded that specific XRP transactions did not meet the criteria for securities transactions. Giancarlo has been quite vocal in his criticism of Gensler’s leadership, mentioning high staff turnover, decreased morale, and excessive enforcement actions as areas of concern.

Giancarlo advocates for establishing a “cryptocurrency advisory board” to maintain a unified, forward-thinking stance on cryptocurrency regulations under the Trump administration. Additionally, he offers suggestions for potential SEC heads, such as Paul Atkins and Kevin Hassett, whom he believes would provide valuable knowledge and a dedication to advancement in this field.

Potential Scenarios 

Lawyers Jeremy Hogan and Fred Rispoli have been exploring possible outcomes in the legal dispute between Ripple and the Securities and Exchange Commission (SEC), considering the potential changes under new leadership. According to Hogan’s perspective, there is a possibility that the commission could decide to drop all lawsuits against cryptocurrencies that are not related to fraud, given its history of cases over the years. Moreover, he anticipates that Ripple and the SEC might reach a settlement on their ongoing lawsuit for the previously determined sum of $125 million. In his words, Hogan stated…

It’s uncomfortable to compromise on something that has already been determined by a court. In ongoing lawsuits involving Coinbase and others, the cases may be dropped. This process won’t happen in January, but prior to summer. That’s my prediction, and I stand by it.

As a researcher in this field, I find it unlikely that dropping the lawsuit is a viable option, given the substantial $125 million penalty at stake. Moreover, I anticipate that the incoming leadership of the SEC might acknowledge the questionable nature of this case and choose to settle instead, considering it the most advantageous outcome for them.

This could mean a decrease in penalties, along with the understanding that Ripple’s current sales of XRP are properly organized so as not to qualify as investment contracts.

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2024-11-28 15:27