Regulation
XRP’s Future Depends on SEC Ruling Against Coinbase Amid Volatility
- Analysts believe that developments in Coinbase’s legal proceedings could impact the future price action of XRP.
- Ripple Chief Legal Officer Stuart Alderoty recently criticized the SEC and its Chairman Gary Gensler for their regulatory approach, citing concerns about excessive regulation stifling the digital asset industry..
While the crypto community has been anxiously awaiting the final settlement and resolution of the SEC case against Ripple, attention has recently shifted to the SEC battle against Coinbase. Market analysts believe that the XRP price movement could reflect the developments in the ongoing SEC-Coinbase legal battle.
The SEC and Coinbase are currently awaiting a court ruling on Coinbase’s motion for interlocutory appeal, filed in April 2024. This motion seeks leave to appeal the ruling on Coinbase’s motion to dismiss (MTD).
Cryptocurrency exchange Coinbase first filed the MTD in August 2023, stating that the SEC does not have the statutory authority to regulate cryptocurrency exchanges, as recently updated by Crypto News Flash. However, Judge Katherine Failla denied the MTD stating:
The court concludes that because the complaint’s substantiated allegations plausibly support the SEC’s claim that Coinbase operated as an unregistered securities dealer, defendants’ motion must be largely denied.
If Judge Failla grants Coinbase’s motion for interlocutory appeal, the SEC case against Coinbase will be stayed until the appeals process is completed. A successful dismissal of the motion could have positive implications for XRP and the broader cryptocurrency market.
Ripple and Coinbase Refer to Binance Ruling
A week ago, Judge Amy Berman Jackson governed in favor of Binance, stating that secondary market sales of the BNB coin do not constitute securities. In addition, the judge also ruled in favor of Binance on secondary market sales of the BUSD stablecoin.
Both Ripple and Coinbase have said that there is currently no linearity when it comes to applying uniform cryptocurrency regulations and that judgments are largely dependent on the judge and the court that issues the ruling, according to the CNF update.
The lack of regulatory clarity prior to that ruling in turn supports Ripple’s position that the Court’s finding of strict liability violations on some of Ripple’s sales (but far fewer than the ones the SEC has alleged to be violations) does not reflect reckless disregard for the law or warrant harsh remedies, Ripple noted.
Stuart Alderoty, Ripple’s Chief Legal Officer (CLO), recently expressed concerns about the United States’ approach to cryptocurrency regulation in a panel discussion at the Point Zero Forum in Zurich, Switzerland. He specifically criticized the U.S. Securities and Exchange Commission (SEC) and its chairman Gary Gensler, accusing them of overly stringent regulation. Alderoty highlighted the significant frustration within the Bitcoin industry caused by the SEC’s actions.
According to Alderoty, the lack of consistency and clarity in the U.S. regulatory environment is hindering the growth and widespread acceptance of digital assets.
Price Action
The current XRP price action is largely in line with the broader market development, especially regarding the repayment of Mt. Gox creditors and the massive sell-off coming from the German government. At press time, XRP is trading up 3.11% at $0.4343 with a market cap of $24.3 billion. If XRP price breaks above $0.50, it could set the stage for a further rally to $0.95, reported Italian:CNF.
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