The SEC vs. Ripple case is gaining more attention. The SEC’s actions in this cryptocurrency case are beginning to raise eyebrows.
We first reported on the XRP – Ripple case against the SEC in July. This excellent summary will bring you up to speed on the SEC’s shocking actions and efforts against XRP while SEC leadership aligned with Bitcoin and Ethereum while helping China.
This past weekend Charles Gasparino on FOX News picked up the story.
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A seemingly esoteric legal battle involving the Securities and Exchange Commission and fintech startup Ripple Labs could provide clarity on how much authority the SEC has over regulating the $2.2 trillion crypto market.
The bad blood between Ripple and the SEC began in December 2020 when the SEC filed a lawsuit alleging Ripple Labs, a global payments platform, had violated securities laws by failing to register its XRP cryptocurrency as a security. The move was one of the last made by then SEC Chair Jay Clayton before he left office following Joe Biden‘s victory over Donald Trump in the 2020 presidential election.
At the time, Ripple was using XRP as a vehicle to finance its core business of seamless cross-border transactions for financial institutions, the SEC charged, something it had been doing for seven years since its founding in 2013.
The lawsuit not only caught Ripple by surprise but added even more confusion to an already convoluted regulatory conversation over whether cryptocurrencies should be considered securities, commodities or something else. If cryptos are securities, as defined by court precedent, they must be approved and regulated by the SEC which demands various company disclosures.
Ripple believes XRP isn’t a security, thus it doesn’t need the SEC’s green light. Moreover, it says the SEC currently allows other cryptocurrencies like Bitcoin and Ethereum to be traded like commodities; the blockchain networks of these cryptocurrencies aren’t being required to register as a security.
The SEC argues that Ripple is different because XRP was actively used to fund Ripple’s business and essentially represents an investment in the company itself. Thus it constitutes security, not a commodity, and falls under the SEC’s regulatory purview under court precedent known as the Howey Test.
Gasparino was on FOX in an interview hours ago discussing the SEC’s case with XRP.
It’s hard to square what happened to Ethereum and with what’s happened to Ripple and why Ripple is held to this level and Ethereum is not.
Many are now saying Ripple won’t settle with the SEC due to the many questionable acts by leaders there.