As a seasoned researcher who has closely observed the ever-evolving landscape of cryptocurrencies and their regulatory battles, I find myself intrigued by Ripple’s unyielding stance against the SEC. While the SEC’s appeal may prolong this legal saga, it seems clear that Ripple is not just fighting for its own survival but also for the broader crypto industry.
Ripple Labs intends to challenge the U.S. Securities and Exchange Commission’s attempt to overturn the court decision, which found that the sale of XRP to retail investors did not breach securities regulations.
In a post on October 3rd, Ripple’s CEO, Brad Garlinghouse, declared his intent to battle the Securities and Exchange Commission (SEC) for as long as necessary, in order to maintain XRP‘s classification as a non-security and ward off the regulator’s challenge. Describing the SEC’s appeal as both misguided and infuriating, Ripple’s top executive penned his thoughts.
It seems they’re yet to comprehend the outcome: they’ve been defeated in what truly matters. The digital currency sector, represented by Ripple, the broader crypto industry, and the legal system have all emerged victorious.
As a crypto investor, I found myself elated when I learned that the SEC filed an appeal on October 2, challenging the decision made by the Southern District Court of New York. This ruling had previously categorized XRP as not being considered a security.
It’s important to remember that on July 13, Judge Analisa Torres decided that the sale of XRP to regular buyers was not considered an unlawful securities transaction. Furthermore, the judge determined that XRP does not fall under the category of a security as defined by the Howey test.
Yet, it became clear that Ripple’s institutional services allegedly breached similar regulations, primarily because of the way the transactions were handled. This alleged misconduct prompted the Securities and Exchange Commission (SEC) to propose a fine of approximately $1.95 billion against Ripple Labs.
In simpler terms, Judge Torres lowered the fine to $125 million and ordered Ripple to officially register with the Securities and Exchange Commission (SEC) should they wish to sell securities in the future.
Following a September 4th agreement in their filing, both parties decided on a hold order. According to this order, Ripple would set aside 111% of the $125 million fine in a secure account as they work through any potential appeals. Essentially, this setup delays the payment and suggests that the SEC may be planning to challenge the ruling.
In a statement, Ripple’s top legal officer, Stuart Aldertoy, expressed that it wasn’t shocking that the commission decided to appeal, given his viewpoint that the agency and its head, Gary Gensler, have been aggressively pursuing what he terms as “legal battles” against the crypto sector.
In a post on October 3rd, Aldertoy expressed that this action only extends an already full-blown embarrassment for the agency. If the blockchain payments company finds it necessary, they plan to file a cross-appeal.
According to Fred Rispoli, the founder of Hodl Law, the waiting period for a possible decision might stretch out. He pointed out that it’s quite unlikely for a verdict from the Second Circuit appeals court to be issued before January 2026, and a more realistic timeline would be around March or April 2026.
Currently, Gensler, head of the SEC, is facing criticism from U.S. lawmakers due to the aggressive approach taken by the SEC towards regulating the crypto sector. In a congressional hearing, there were criticisms directed at Gensler for using terms such as “crypto asset security” that are unclear and ambiguous, particularly when discussing digital assets like Ethereum.
Meanwhile, Ripple persists in its worldwide growth strategy, overcoming intricate legal hurdles. Notably, the company has obtained preliminary approval in Dubai.
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2024-10-03 10:32