In a move that has been hotly debated among the crypto world, the United States Securities and Exchange Commission (SEC) has roundly scorned Judge Analisa Torres’ judgment in the case between Ripple and the SEC. The SEC’s recent statement in opposition to Coinbase’s request to appeal the ruling signifies that the authority sees the Ripple opinion as an exception that sets a poor precedent for such actions.
Yes if no court follows SEC v Ripple and the SEC wins all these other big crypto cases but the SEC does not appeal or does not succeed in an appeal against Ripple then programmatic sales by Ripple will stand alone as not needing to be registered. If that happens, even if the… https://t.co/E7iz5UuKAa
— bill morgan (@Belisarius2020) May 10, 2024
SEC’s dismissive stance on the Ripple ruling
Judge Torres gave a summing up ruling in the SEC vs. Ripple case, July 2023, that the sales of the XRP tokens through platforms did not equate to a securities offering and hence confirmed that the XRP token is not a security. The ruling was of great import to Ripple and its supporters, as they now had a legal precedent for their token sales without having to regard them as investment contracts.
The SEC came really strong in its opposition to Coinbase’s bid to overturn the ruling against it by pointing out that “no court has endorsed the Ripple’s case so far”. By making this declaration, the agency suggests that other courts may not have been following the same legal principles or related precedents that Judge Torres had established, so it could leave a doubt about the validity and relevance of this judgment in future trials.
The SEC’s comment regarding the Ripple case is just one part of its overall position that Coinbase’s petition for the respective appeal is not feasible. According to experts, the regulator has set itself as a guardian of its commitment to digital asset regulation, which could otherwise have been used as a basis for ruling in favor of Ripple suing in other courts that might permit similar strings of actions.
Ongoing regulatory challenges
SEC’s mocking the Ripple resolution gave a kickoff to a heated crypto community discussion. Supporters of this decision contend that it has given absolute legal status to digital assets and could pave the way for the extension of additional certainty of regulation in this field. Alternatively, critics state this decision was rather constrained and might be limited concerning the specific details of the Ripple case.
Both legal experts and business analysts carefully examine how the SEC evolving standpoint on the Ripple case would impact the business sector. Others consider that the Agency’s criticism might be part of the strategy to demonstrate that the decision was not construed as a broadly applicable precedent, which will prevent the loss of its autonomy in regulation.
Since the crypto world has been growing and trying to find its way through the very complex framework of regulation, the SEC’s approach in the Ripple court case is an example of the many issues and uncertainties dual asset regulation is associated with. Although the judgment laid down some grounds for Ripple and its followers, the SEC’s attitude brought to light the agency’s strong-willed quest to retain the enforcement powers and remake the already existing regulations according to its own interpretation.
