HomeUncategorizedRipple v. SEC: Law Veteran Backs Escrow Freeze for XRP, Adding Intrigue...

Ripple v. SEC: Law Veteran Backs Escrow Freeze for XRP, Adding Intrigue to Legal Battle

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  • Mark Fagel, a former attorney and SEC director, has expressed agreement with the idea of imposing a fine on Ripple and locking away the majority of its escrow funds.
  • Fagel’s support aligns with the notion that moving forward, circulating XRP should be classified as a commodity rather than a security.

In the midst of the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), an intriguing discussion has emerged involving Mark Fagel, a former attorney and former SEC director in San Francisco. Fagel has lent his support to a controversial proposal put forth by a member of the XRP community. This proposal centers on the desired outcome in the SEC’s case against Ripple.

The debate was sparked by a tweet from an individual within the XRP community who outlined their ideal scenario for the case. Their suggestion entailed imposing a fine on Ripple and transferring the majority of its escrow funds to the SEC, where they would be locked away permanently. However, the proposal also included a forward-looking aspect, suggesting that all circulating XRP should be reclassified as a commodity rather than a security. In response to this proposition, Fagel concurred, stating that it sounded reasonable enough, indicating his alignment with this viewpoint.

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This discussion gained traction following the recent development in the SEC’s legal theory regarding secondary market sales, which was put forth in response to Coinbase’s motion. The SEC asserts that the economic nature of a transaction involving a crypto asset security remains unchanged even when it becomes available on a trading platform like Coinbase. Fagel expressed his personal belief that the SEC’s statement is consistent with the policy and intent of securities laws. However, he also acknowledged that the existence of legal precedents to support this stance remains uncertain.

Fagel emphasized the complexity surrounding the determination of whether successive sales of a token involve securities. This complexity is particularly pronounced when considering the evolving nature of a token’s utility and its potential transformation over time. Factors such as utility and the token’s role in the market play a significant role in this determination.

The expression of support from a legal veteran like Fagel adds further intrigue to the Ripple v. SEC legal battle. As the case unfolds, the industry and stakeholders eagerly await a resolution that will provide clarity on the regulatory status of XRP and potentially shape the future of cryptocurrencies.

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