Following the Court of Appeals for the Third Circuit’s decision, which partly supported Coinbase in its legal dispute with the SEC over rulemaking, legal analysts are discussing the implications for the ongoing Ripple versus SEC case and the need for definite cryptocurrency regulations.
The chatter revolves around yet another setback for SEC Chairman Gary Gensler, as a court deems the U.S. Securities and Exchange Commission’s actions in lawsuits concerning cryptocurrencies as “unreasonable” or “hasty.
Pro-XRP Lawyers’ View on Implications for Ripple vs SEC Lawsuit
The Third Circuit Court of Appeals decided that the Securities and Exchange Commission (SEC) had no valid reason for rejecting Coinbase’s proposal for rulemaking. The appellate court judges urged the regulatory body to offer a detailed explanation of the rules and criteria they use to classify digital assets as securities, along with justifications for these classifications.
Attorney James Murphy, also known as MetaLawMan, advocates that the U.S. Securities and Exchange Commission (SEC) should postpone any rule-making concerning cryptocurrencies until the United States Congress passes a bill outlining the market structure, thereby clarifying the legal difference between digital assets classified as commodities and securities.
Lawyer Fred Rispoli responded to Paul Grewal’s post, in which he announced a successful writ of mandamus petition at the Third Circuit for Coinbase. Rispoli stated that, so far, Coinbase has lost most of its arguments, and their only victory was the court requiring the SEC to offer solid reasons for rejecting the petition.
Nevertheless, he emphasized that Judge Bibas’ remarkable alignment with the 2nd Circuit Court’s expectations is significant. His statement underscores how antiquated regulations from a century past can still be applicable in the realm of cryptocurrency.
When I discuss it, you’ll see that the existing rules don’t align well with this modern technology, and their approach to enforcing these rules could potentially trigger constitutional issues related to giving proper notice.
As a researcher, I find Fred Rispoli’s perspective compelling: if the 2nd Circuit Court of Appeals were to follow this particular reasoning, it could potentially mark a significant shift in the regulatory landscape for cryptocurrencies, effectively limiting the Securities and Exchange Commission’s (SEC) authority over these digital assets. This decision might even lead to the court reprimanding the SEC, either by dismissing or extending their appeal, as it suggests that the SEC may have fallen short in fulfilling its duties with integrity and good faith in regulating this sector.
Ex-SEC Lawyer’s Insights in Relation to XRP Case
Previously, former SEC attorney James Farrell disclosed that the court decided any of the three reasons provided by the U.S. Securities and Exchange Commission (SEC) could be sufficient for their decision. These possible reasons include: “no necessity for rulemaking,” “desire for more information prior to rulemaking,” or “other resource priorities.” However, the SEC must explicitly choose one or more of these reasons and explain their rationale behind it.
In simpler terms, he acknowledged that Judge Bibas’ agreement leaned more towards the side of the industry. Yet, it’s important to note that this same judge also expressed the opinion that certain cryptocurrencies are essentially designed to bypass securities laws.
Consequently, the court has not offered clear guidance yet, as it hinges on how the Securities and Exchange Commission categorizes certain digital assets as securities.
Significantly, many legal experts believe that a similar decision could be made in other courts when the main group of judges finds the argument in a fellow court’s agreement with the case appealing.
Opening Brief in Ripple Vs SEC Lawsuit
The crypto world and legal professionals are eagerly waiting for the main argument brief from the U.S. Securities and Exchange Commission (SEC) regarding its appeals in the SEC vs Ripple lawsuit, which is due by January 15th. Some lawyers like Jeremy Hogan and former SEC member Marc Fagel speculate that pro-crypto advocate Paul Atkins, under the Trump administration, may decide to stop pursuing the appeal any further.
Based on a review of the opening argument outlined in the SEC’s filing (Form C) and the views expressed by former SEC Chair Gary Gensler regarding cryptocurrencies, we have an idea of what might be coming from the U.S. SEC on this matter.
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2025-01-15 07:49