- Ripple reaffirms its stance to challenge the SEC lawsuit, citing XRP is not a security but more similar to a commodity.
- The ongoing SEC lawsuit against Ripple is emblematic of the broader regulatory uncertainty facing the crypto industry, with firms like Binance and Coinbase also in the crosshairs.
U.S. Crypto Regulation Faces Contentious Moments
In 2020, the world of cryptocurrency faced a pivotal moment when the U.S. Securities and Exchange Commission (SEC) leveled charges against Ripple. The crux of the contention was Ripple’s alleged violation of securities laws by selling its native cryptocurrency, XRP, without an initial registration with the SEC. Ripple counteracted, making a strong argument that XRP should not be viewed as a security but rather parallels a commodity.
Fast forward to July, a seminal ruling by U.S. District Judge Analisa Torres was seen as a victory for Ripple. The judge emphasized that XRP, as a standalone entity, does not fit the conventional framework of a security. Monica Long, Ripple’s president, reiterated this sentiment in a conversation with CNBC, emphasizing the implications of this ruling, not just for Ripple but for the broader potential of XRP on a global scale.
But the Ripple-SEC battle isn’t unique. The crypto landscape has witnessed increasing scrutiny from regulators, leading to growing discontent among industry leaders. Pioneers like Coinbase and Binance, similar to Ripple, find themselves navigating murky legal waters with the SEC. The heightened regulatory spotlight has even driven these crypto magnates to contemplate relocating outside the U.S., pointing towards a broader narrative of regulatory ambiguity.
Adding another layer to this legal maze, U.S. District Judge Jed Rakoff refuted the approach adopted by Judge Torres. The SEC, not missing a beat, seized this opportunity to push for an appeal against the previously hailed ‘landmark’ ruling on XRP‘s classification. While the verdict on this appeal remains pending, Ripple’s defense remains unwavering, suggesting that the SEC’s move stems from mere “dissatisfaction” with the initial judgment.
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Beyond the courtroom, Ripple continues to underscore its commitment to regulatory compliance. A testament to this is its recent in-principle approval from the Monetary Authority of Singapore to provide regulated crypto services. Monica Long emphasized,
“When we build [a] product, compliance is in the room.”
Adding another feather to its cap, Ripple recently announced its acquisition of crypto infrastructure startup, Fortress Trust. This move, closely following its previous purchase of Swiss firm Metaco, showcases Ripple’s ambition to consolidate its position in the rapidly evolving crypto sphere.
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