As a crypto investor with some experience in following regulatory developments, I find the ongoing legal battle between the SEC and Ripple to be of significant interest. The recent ruling by Judge Torres that XRP is not a security when sold to retail investors on exchanges has brought about mixed feelings among the community. While it’s a win for the crypto industry in terms of regulatory clarity, it also leaves us with unanswered questions regarding Ripple’s sales to institutional investors and the SEC’s possible response.
According to Jeremy Hogan, a legal partner at Hogan & Hogan, it’s unlikely that the US Securities and Exchange Commission (SEC) will achieve a decisive win in their ongoing case at the US Court of Appeals for the Second Circuit.
According to Hogan, if the SEC pursues an appeal in this case, there is a risk of unfavorable results for the agency.
If the regulator successfully overturns the decision on appeal, the case would once again return to the trial court for additional fact-finding.
In a major setback for the Securities and Exchange Commission (SEC), Judge Analisa Torres decided that XRP tokens weren’t considered securities when sold to individual investors on digital exchanges in July 2023. Yet, Ripple was found to have broken federal securities laws during its XRP transactions with institutional investors.
Former SEC Division Chief Kristina Littman recently expressed her view that the SEC might choose not to appeal the Ripple case, allowing the district court decision to stand as is.
According to U.Today’s report, Judge Rakoff, who presided over the SEC’s case against Terraform Labs, explicitly rejected the Ripple ruling in my opinion. He argued that a token’s legal status should not hinge on whether it caters to institutional or retail investors. This stance was also endorsed in the Coinbase decision, favoring the Securities and Exchange Commission (SEC).
It’s uncertain if the SEC will continue to challenge the Torres ruling in court after securing some victories. The case is currently in the remedies stage, with Ripple working to significantly decrease the proposed fines and penalties.
Last July, Gensler indicated that the SEC might consider appealing the Torres decision. “We’re still examining it and evaluating,” was his statement at the time.
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2024-06-20 23:06