September 29, 2021, Brazil. In this photo illustration the Ripple (XRP) logo seen displayed on a smartphone
- Grayscale Investments’ legal triumph raises queries about the trajectory of Coinbase’s SEC lawsuit.
- Ripple voices skepticism about SEC’s uniformity; regulatory clarity is in question.
Following Grayscale Investments’ success in their legal battle against the U.S. Securities and Exchange Commission (SEC), analysts are considering the court’s likelihood of approving the motion by cryptocurrency exchange Coinbase to dismiss the SEC lawsuit against them.
Ripple’s legal team, including the Chief Legal Officer, CEO, and other experts, believe that the actions taken by the SEC and its chairman, Gary Gensler, might ultimately be deemed inconsistent with legal principles and an indication of insufficient regulatory guidelines in the cryptocurrency space.
Grayscale Investments secured a favorable outcome from a three-judge panel at the DC Circuit Court of Appeals, as the U.S. SEC could not provide sufficient justification for rejecting applications for Bitcoin ETFs focused on the spot market. The absence of clear guidance from both the SEC and Gary Gensler raises questions about the classification of cryptocurrencies as securities, highlighting a notable lack of regulatory clarity in the cryptocurrency realm.
John Deaton, a prominent lawyer supporting XRP, mockingly comments on the SEC and Gary Gensler’s setback in the Grayscale case, quipping,
“Gary Gensler, how’s your strategy of regulating through enforcement working out?”
Deaton also expresses complete agreement with analyst Scott Melker, known as “The Wolf of All Streets,” who believes that Coinbase will overwhelmingly succeed against the SEC in their legal battle. Additionally, Deaton asserts that Gary Gensler is set to become one of the most ineffective commissioners in history.
True story https://t.co/ME30wferKB
— John E Deaton (@JohnEDeaton1) August 30, 2023
Ripple Executives Disapprove of SEC’s Cryptocurrency Regulation
Ripple’s CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty criticized the SEC’s approach to regulating the cryptocurrency sector. Alderoty commented:
“The SEC is getting battered in the court. In our case, it’s been proven wrong, been called hypocritical, lacking faithful allegiance to the law, fined for discovery abuses, and now another distinguished court saying it’s “arbitrary and capricious” – that’s a really big deal.”>> Buy XRP quickly and securely with PayPal, credit card or bank transfer at eToro. Visit Website
Garlinghouse expresses his dissatisfaction with the necessity for the cryptocurrency community to resort to legal proceedings to demonstrate the flaws in the SEC’s policy of enforcing regulation due to the absence of clear regulatory guidelines. At the same time, he highlights that the SEC disregards factual evidence and legal principles in their attempt to support their argument.
While these are great outcomes… and it’s feeling like a summer of justice…
it’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently WRONG on the facts and the law. https://t.co/sdZpaO4coh
— Brad Garlinghouse (@bgarlinghouse) August 29, 2023
Meanwhile, leaders at Ripple have continuously criticized the SEC’s approach to cryptocurrency regulation. Specifically, Alderoty accuses the SEC of regulating the cryptocurrency industry through enforcement actions rather than adhering to established legal frameworks.
Following Grayscale’s success, the stock price of Coinbase (COIN) experienced a surge of over 15%, ultimately closing with a notable increase of 14.91% at $84.70. This victory enhances Coinbase’s prospects for prevailing in its legal battle against the U.S. SEC, as the previous legal outcomes set a precedent that weakens the SEC’s arguments against cryptocurrencies.
SEC vs. Ripple Lawsuit
Ripple has directly confronted the SEC in an intense legal conflict spanning over two years. Despite the court delivering a summary judgment, the case might continue for an additional two years or even longer, given the SEC’s intention to challenge the aspects of the judgment that favored Ripple.
According to reports, the SEC intends to contest the ruling regarding Ripple’s automated XRP sales and other forms of distribution.
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