- The U.S. SEC has questioned the legal influence of Ripple’s recent favorable ruling in its case against Coinbase.
- The SEC maintains that Ripple’s non-security status for XRP sales is yet to be endorsed by other courts.
- Legal experts suggest that Ripple’s ruling could be an isolated win in the crypto industry.
The SEC has cast doubt on the legal influence of Ripple’s recent favorable ruling, suggesting it may not set a precedent for other crypto cases. This development could have significant implications for the broader crypto industry.
SEC Challenges Ripple’s Favorable Ruling
In a recent development, the U.S. Securities and Exchange Commission (SEC) has questioned the legal influence of Ripple’s favorable ruling in its case against Coinbase. The SEC argues that Ripple’s non-security status for XRP sales remains unendorsed by other courts. This critique was part of the SEC’s argument against Coinbase’s request for an interlocutory appeal.
Context: Ripple vs SEC Case
In the SEC vs Ripple case, Judge Analisa Torres ruled in July 2023 that programmatic sales of XRP tokens through exchanges did not constitute securities offerings, thus not violating securities laws. This ruling affirmed that XRP is not a security, and token sales on exchanges do not constitute investment contracts. However, the SEC’s recent complaint against Coinbase alleges that the cryptocurrency exchange has been acting as an unregistered intermediary for “crypto asset securities.” The SEC believes that the digital assets listed on Coinbase’s platform are securities, and sales through the platform are investment contracts. This view directly conflicts with Judge Torres’s ruling that tokens like XRP sold on exchanges are not securities.
SEC’s Argument Against Coinbase’s Appeal
In their latest filing against Coinbase’s appeal, the SEC remarked that “no court has followed Ripple.” The argument implies that other courts have not echoed the legal reasoning or precedent established in the Ripple case and thus cannot apply in Coinbase’s case. This statement suggests that the SEC views the Ripple decision as an outlier, potentially lacking in legal influence or validity.
Implications for the Crypto Industry
Reacting to the development, pro-XRP lawyer Bill Morgan suggested that if other courts do not adopt the SEC vs. Ripple case ruling and the SEC wins its other major crypto lawsuits, Ripple’s victory regarding programmatic sales would stand in isolation. Essentially, it would mean that Ripple could continue its programmatic sales unregistered. However, the ruling may not necessarily serve as a legal precedent for other entities in the crypto industry.
Conclusion
The SEC’s stance on Ripple’s favorable ruling could have significant implications for the broader crypto industry. If the SEC’s viewpoint prevails, Ripple’s victory may stand in isolation, potentially not setting a legal precedent for other crypto entities. The crypto industry will be closely watching the developments in these legal battles.
