Cardano Creator Speaks Out on ‘XRP Case’ Appeal: New Crypto Test Incoming?

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As a seasoned analyst with over two decades of experience in the financial markets, I’ve witnessed numerous regulatory battles that have shaped the landscape of various industries. The recent SEC appeal against Ripple is undoubtedly one such battle that has captured the attention of the crypto world.

It has been announced that Ripple is challenging the SEC’s case against them following an unusual ruling on August 7, which required Ripple to pay a $125 million fine rather than the $2 billion the SEC had initially sought. The reason for this appeal is that the district court’s decision contradicts long-standing Supreme Court precedents and established securities laws.

Stuart Alderoty, Ripple’s Chief Legal Officer, expressed his disappointment over the SEC’s decision to file a lawsuit against them. He described the lawsuit as both “irrational” and “misguided,” suggesting that it lacked merit from the very beginning. Furthermore, he pointed out that the court had previously dismissed the SEC’s claim that Ripple acted carelessly and there were no accusations of fraud, harm to consumers, or financial losses.

Charles Hoskinson, the creator of Cardano, reacted to Alderoty’s remarks by humorously proposing that the ongoing Ripple case might eventually overtake the Howey Test as the standard for identifying investment contracts under U.S. securities law.

Stu, you ready to replace Howey with the Ripple Test 🙂

— Charles Hoskinson (@IOHK_Charles) October 3, 2024

Indeed, Hoskinson’s statement seems to be playful. Given that the founders of Ripple (XRP) weren’t part of the project back in 1946 as suggested, and the Ripple case is a significant topic within the crypto market, it isn’t entirely implausible.

In the realm of digital assets, many professionals are viewing this situation as a significant juncture that may bring much-needed clarity to the regulations governing these assets. The resolution could potentially establish new benchmarks for securities law in the context of cryptocurrency.

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2024-10-03 15:42