US SEC tries to overturn the Ripple Labs cryptocurrency ruling

Reuters: NEW YORKThe recent court ruling against Ripple Labs, which was a setback for the organization’s efforts to regulate cryptocurrency markets, will be appealed by the U.S. Securities and Exchange Commission. The sale of Ripple’s XRP digital coin on public exchanges conformed with federal securities laws, according to U.S. District Judge Analisa Torres’ July 13 …

Reuters: NEW YORKThe recent court ruling against Ripple Labs, which was a setback for the organization’s efforts to regulate cryptocurrency markets, will be appealed by the U.S. Securities and Exchange Commission. The sale of Ripple’s XRP digital coin on public exchanges conformed with federal securities laws, according to U.S. District Judge Analisa Torres’ July 13 ruling, which the SEC requested be reviewed by a federal appeals court. According to the SEC, an appeal could address legal matters when there was “substantial ground for differences of opinion.” As well as a “large number” of additional litigation, it claimed that the outcome of an appeal would have a “particular consequence” on its capacity to enforce securities laws. The SEC has long asserted that it has the authority to regulate digital assets such as cryptocurrencies since they are considered securities, just like stocks and bonds.

In December 2020, it filed a lawsuit against Ripple, Chief Executive Brad Garlinghouse, and Co-Founder and Chairman Chris Larsen, charging them with illegally selling XRP to raise more than $1.3 billion in an unregistered securities offering. Because buyers had no reasonable expectation of benefit based on Ripple’s efforts, according to Torres, Ripple did not violate the law when the XRP coin was offered on public markets. However, U.S. District Judge Jed Rakoff, who sits on the same court, made a decision in the opposite direction eighteen days later, concluding that the Terra USD token provided by Terraform Labs qualified as a security when sold on open markets. Torres’ ruling was not entirely in Ripple’s favor because she determined that the company had broken securities regulations by selling XRP to institutional investors. The judge will have to decide whether to halt the case and allow the SEC to appeal her ruling. Requests for response from Ripple and the lawyers representing Ripple, Garlinghouse, and Larsen were not immediately fulfilled. The SEC, which is led by Gary Gensler, has filed more than 100 enforcement cases involving cryptocurrencies, though many of them resulted in settlements.

Additionally, Gensler has made an effort to control the cryptocurrency sector’s excessive speculation, which he claims damages investor confidence in American capital markets. The SEC complaint charging Coinbase, the largest cryptocurrency platform in the United States, of operating illegally because it neglected to register as an exchange is unaffected by the Ripple and Terraform instances. The SEC is also suing Binance, the biggest bitcoin marketplace in the world.

 

 

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