“The ruling that XRP is not itself an investment contract is a significant blow to the SEC's case against and the other crypto exchanges,” tweeted James Murphy, also known by Twitter pseudonym MetaLawMan, after the decision was announced. With the court’s ruling on XRP, legal commentators were quick to note how this decision would be useful to Coinbase. It is for this reason that Coinbase moved to back Ripple last year in the case. Coinbase rejected the accusations, and the case is beginning to go through its pre-trial motions.Īt its core, the two cases are bound together by the central question of whether or not the digital tokens in question can be considered securities. On June 6, the company was hit by an SEC lawsuit that alleged it was operating an unregistered securities exchange that was dealing with unregistered securities. Recently it garnered even more attention as onlookers use it to gauge how the SEC might fair in its lawsuit against Coinbase.
But $728 million worth of contracts to sell XRP to institutional investors did constitute unregistered securities sales, since those investors "would have purchased XRP with the expectation that they would derive profits from Ripple’s efforts."Īttorneys and industry players have been closely scrutinizing Ripple's case over the last two years. In her decision, Torres ruled that Ripple's XRP token does not immediately qualify as a security when it's been offered through programmatic sales to the public or distributed to employees of Ripple Labs. "We've carefully reviewed our analysis," he wrote. To be clear, Judge Analisa Torres wrote in a footnote of her Ripple ruling this morning that she could not make a ruling on secondary sales of XRP, like those that take place on exchanges, "because that question is not properly before the Court."Įven so, Coinbase Chief Legal Officer Paul Grewal said on Twitter that the company feels comfortable allowing XRP trading again. Update: Trading is now expected to begin in ~45 minutes, on or after 1:45 PT today, if liquidity conditions are met. She pointed to two regulatory proposals in the House as Congress continues to debate a federal framework for regulation.$0.170221 38.83% Terra Classic (Wormhole) “Contrary to what says, there is no regulatory clarity for digital assets,” the association’s CEO, Kristin Smith, said in a statement Tuesday.
By targeting the marketplaces where trades are brokered and cleared, the agency is taking aim at the cryptocurrency industry’s critical infrastructure, an unwelcome development for pro-crypto groups like the Blockchain Association. The cases extend beyond the two exchanges themselves. Still, the SEC’s actions are “sending a loud and clear message to the public: ‘buyer beware,’” said Better Markets President Dennis Kelleher, whose advocacy group has called for more stringent regulations on the crypto industry. Bitcoin, the most-traded cryptocurrency, dropped sharply Monday but jumped back up Tuesday to trade at around $27,000 - significantly higher than where it traded late last year in a broader industry decline that has come to be known as “ crypto winter.” The lawsuits don’t appear to have spooked crypto investors much.
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