Is Ripple Planning To Settle With SEC? Understand The High Stakes Involved
Speculation is rife that Ripple, the famous American tech firm responsible for the creation of XRP infrastructure, might be nearing a resolution with the U.S. Securities and Exchange Commission (SEC).
Does XRP Fulfill the Criteria for a Security?
At the heart of this legal battle is the SEC’s contention that Ripple has overseen the distribution of a whopping 14.6 billion units of the cryptocurrency, XRP. Accordingly, the SEC has pressed charges against Ripple, including its CEO, Brad Garlinghouse, and co-founder, Christian Larsen, for not registering XRP as a security – a prerequisite for any public offering and sale of securities. Therefore, the crux of the matter for the court is to determine whether XRP can be classified as a security.
Also Read Ripple Vs. SEC Lawsuit: Attorney Bill Morgan Analyzes The Latest Developments
The Burning Question: Is XRP a Security?
The SEC insists that XRP qualifies as a security due to reasons that are contextually reasonable, but could fall apart if cryptocurrencies are considered in their entirety. Additionally, the SEC suggests that crypto token buyers are likely motivated by expected profits driven by the efforts of the token issuers.
Contrary to the SEC’s stance, Ripple argues that not all XRP buyers are profit-driven, nor are they dependent on the company’s managerial actions. Furthermore, with an open-source design, XRP’s performance can be influenced by countless factors, many outside Ripple’s control.
SEC’s Valid Stance
The SEC’s argument, however, isn’t entirely unfounded. Some crypto tokens indeed aren’t fully decentralized, and information asymmetry does exist. But, these regulatory challenges tailored to traditional securities might inadvertently hinder the growth of revolutionary fintech and indirectly impose a de facto ban on cryptos. Crypto restrictions can also inadvertently propel legitimate businesses towards grey or black markets, posing a risk to financial integrity.
Can This Backfire?
Conversely, a court decision favoring Ripple might also have unintended consequences. Even a slight hint of legal endorsement could be misinterpreted as validating the volatile and potentially exploitable crypto industry. The perceived legitimacy could embolden crypto enthusiasts, thereby threatening financial stability.
Related: Ripple Vs SEC News: Judge Unseals Hinman Documents, Could This Backfire For XRP?
What Are The Stakes?
A triumphant outcome for Ripple could potentially have a domino effect on the cryptocurrency landscape. It might empower other cryptocurrency issuers and inform rulings in similar court cases. Moreover, such a victory would alleviate the strain on other cryptocurrency companies, such as Coinbase, Paxos, Circle, and Kraken.
On the other hand, a loss for Ripple could cast a long shadow over the U.S. crypto industry. The negative implications extend beyond Ripple and XRP. The SEC could potentially impose fines on numerous crypto projects. The US is the largest crypto market in the world, and hampering the adoption and innovation in the country could significantly harm the crypto industry as a whole.
Ripple Vs SEC News: Pro-XRP Lawyer John Deaton Explains The Scenario If Ripple Agrees to Settle With SEC
Attorney John Deaton took to his Twitter handle on Tuesday and addressed the question of why and how Ripple would settle if they win their ongoing legal battle. Deaton has been a vocal advocate for XRP and has argued that the SEC’s actions have harmed XRP investors and the broader crypto industry. He said that it is important to understand that a settlement doesn’t necessarily mean Ripple would agree to the same terms they would have agreed to two years ago.
He gave an example of a hypothetical situation and said that if the SEC were to issue a statement that all future sales of XRP are not securities in exchange for Ripple agreeing to pay $50M and not appealing the case, it could provide some certainty and clarity around the regulatory status of XRP.
“Quite a few people ask why would Ripple settle if they won. First, I didn’t say Ripple would agree to the same terms of a settlement they would’ve agreed to 2 years ago. It all depends on the ruling itself. Does Coinbase and Kraken immediately relist or wait for an appeal?”
This would be positive news for Ripple and its investors, as it could help to remove some of the uncertainty and legal risks that have been associated with XRP. Moreover, the return of liquidity to the US market could provide a boost to XRP’s value and adoption, which could benefit Ripple and its partners, including Bank of America.
“If Judge Torres’ decision is in Ripple’s favor and it facilitates liquidity to return to the U.S. and it causes U.S. businesses to not worry about pissing off the SEC if they use XRP, then that’s a different story.”
Overall, the outcome of the prolonged legal case will likely have significant implications for Ripple’s partners.
Just In-Ripple Could Pay $250 Million to Settle the Lawsuit with the SEC-John Deaton
The post Just In-Ripple Could Pay $250 Million to Settle the Lawsuit with the SEC-John Deaton appeared first on Coinpedia Fintech News
The Ripple vs SEC lawsuit is becoming more fascinating every new day as the possibilities of the settlement are now fluttering within the space. Although Ripple CEO, Brad Gardlinghouse has stated that the company will not settle the case with the authority as they are confident to come out victorious. However, the XRP proponent and the representative of XRMArmy in the court, John Deaton believes that the blockchain company may pay millions of dollars to settle if required.
John Deaton asserted that Ripple could pay $250 million to the SEC to settle the case. Answering a query on partial settlement raised by Digital Asset Investor, Deaton made a response seeing the future sales of XRP which may not be considered as securities.
IMO Ripple would pay $100-250M in a settlement IF the SEC agreed publicly that current and future sales of XRP are not securities. The SEC is NOT going to agree to that in the middle of its war
crypto. Judge Torres could provide clarity on secondary sales which isn’t appealed.
— John E Deaton (@JohnEDeaton1) February 21, 2023
However, Deaton also made it clear that the SEC may certainly not agree to such a condition from Ripple in times when the authorities have wagged a war against the crypto space. Deaton also said the secondary sales of XRP have not been appealed and hence Judge Torres may provide more clarity on this.
Deaton’s statement on settlement came out after the XRPArmy raised multiple queries and their eagerness to know whether both parties settle the case before Judge Torres produces the judgment. In the meantime, the XRP community anticipates the lawsuit to be in favor of the company. This could be a win situation for the company with the XRP being relisted in all the major exchanges and making it accessible for all the traders.
Bittrex Charged For Violating Sanctions, US Treasury Agrees To Settle
The post Bittrex Charged For Violating Sanctions, US Treasury Agrees To Settle appeared first on Coinpedia Fintech News
The Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) of the United States Treasury Department reported on October 11 that they had settled charges with the crypto exchange Bittrex. The cryptocurrency exchange was charged with breaking sanctions and failing to establish appropriate sanctions compliance measures from March 2014 to December 2017.
The violations were caused by transactions from “individuals reportedly situated in the Crimea area of Ukraine, Iran, Sudan, Cuba, and Syria,” according to US Treasury regulators. U.S. officials state that the transactions added up to $263M worth of cryptocurrency transactions that were in violation of the country’s financial sanctions.