TL;DR Breakdown
- Ripple’s progress so far in the case against SEC boosts their confidence in winning the regulator.
- A win for Ripple is a win for the crypto industry.
The CEO of Ripple, Brad Garlinghouse has given a powerful impression with the ongoing case that was presented in court against the US Security and Exchange Commission (SEC). Giving a report at the Paris blockchain event, he noted that the case is taking a different route altogether. He is, however, thrilled by the outcome of their defense and added that the situation surpassed their expectations.
Additionally, he said that a win on the case reflects a win for the crypto market. Garlinghouse, in his statement, said that it was almost time when crypto and other exchanges to become free from the regulations of the SEC that are unfavorable.
Ripple vs. SEC
The case was filed 15 months ago. Brad Garlinghouse, his firm, as well as his Ripple’s chair (Chris Larsen) were alleged of engaging in an activity that was said to be illegal, per SEC. The two key personalities and the blockchain payment firm were accused by the regulator of issuing unregistered securities of up to $1.3 billion via XRP.
The SEC opted to apply the Howey Test that was from a decision by the supreme court. The presented case aims at defining and making public the difference that exists between an investment contract and its counterpart investment securities. XRP coins were sold without meeting the appropriate criteria.
In defense, Ripple’s team argued that XRP operations are similar to those of Ethereum (ETH) and Bitcoin (BTC), which are considered securities. XRP should be handled as virtual currency instead of an investment contract, according to them.
Winning is important for XRP and crypto market
Should the blockchain lose the case, Garlinghouse believes the crypto market could also face the hit. He said that the case is as important for the crypto market as it is critical for their company. The blockchain payment company and other exchanges that listed XRP will be required to register and be regulated by SEC under the securities law if Ripple loses.
However, the firm is hopeful of winning the case since the proceeding results are promising. The XRP community was in celebration on 12th April 2022, after Judge Sarah Netburn denied SEC’s motion for reconsideration of the DPP ruling on former director William Hinman’s speech, where he reportedly described how securities laws apply to digital assets. The regulator was ordered to release 68 drafts of Hinman’s speech to the blockchain company.
These milestones and prevailing success so far give more hope to Ripple and the XRP community. At the time of writing, XEP was trading at $0.755 on Coinmarketcap.
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