XRP Lawyer Highlights Judge’s Criticism of SEC’s Approach Amid Recent Events

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As a seasoned researcher with a keen interest in the intersection of law and technology, I find myself intrigued by the ongoing saga between the U.S. Securities and Exchange Commission (SEC) and the cryptocurrency industry. My journey through the labyrinthine world of digital assets has been marked by countless hours poring over case files, legal rulings, and regulatory guidelines.

In some recent court decisions, judges have been critical of how the U.S. Securities and Exchange Commission (SEC) has been handling cryptocurrency regulations. Specifically, they have questioned the SEC’s method of categorizing digital assets as securities.

Bill Morgan, an attorney and XRP supporter, emphasizes these critiques within a series of tweets as a response to the Securities and Exchange Commission’s perspective on cryptocurrencies.

Judge Torres in SEC v Ripple told the SEC that the XRP token itself is not a security /1 — bill morgan (@Belisarius2020) August 29, 2024

Initially, Morgan emphasized that in the legal battle between the SEC and Ripple, Judge Torres clearly declared that XRP isn’t classified as a security on its own. This ruling significantly weakened the SEC’s claim that because XRP functions as a digital asset, it falls under securities law regulation.

As highlighted by Morgan, Judge Orrick in SEC v. Payward Inc (Kraken case) told the SEC that “orange groves are no more securities than cryptocurrency tokens are,” delivering a pointed critique of the SEC’s approach. 

As a researcher, I find myself emphasizing the importance of the Securities and Exchange Commission (SEC) maintaining a distinct separation when it comes to evaluating the inherent characteristics of cryptocurrencies and assessing the sales transactions associated with these assets.

In the case SEC v. Binance, Judge Jackson firmly dismissed the Securities and Exchange Commission’s (SEC) interpretation that cryptocurrency tokens are always representations of investment contracts. Instead, he suggested that these tokens might only be involved in investment contracts under specific conditions.

Recent events

This year, the Securities and Exchange Commission (SEC) has taken action against several Ethereum and decentralized finance-related crypto companies by sending Wells notices, filing lawsuits, or reaching settlements. These companies include ShapeShift, TradeStation, and Uniswap.

Various digital currency exchange services such as Coinbase, Kraken, Binance, and Robinhood have encountered legal issues with regulatory bodies.

Recently, Ripple celebrated a major victory in their long-standing legal dispute with the SEC. The court reduced the SEC’s initial demand by approximately 94%, requiring Ripple to pay only $125 million, effectively concluding their four-year-long battle.

As a researcher, I’ve recently observed an update in the financial landscape: my attention has been drawn to the Securities and Exchange Commission (SEC) broadening their enforcement actions within the cryptocurrency sector by including OpenSea, a prominent digital marketplace, in their list of focus areas.

On Wednesday, the CEO of the company announced via a post that the U.S. Securities and Exchange Commission (SEC) has sent a Wells notice to OpenSea, claiming that the digital tokens (NFTs) traded on its platform might be classified as securities. The head of OpenSea described this action by the SEC as venturing into unexplored territories.

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2024-08-29 16:11