In a seemingly unending legal saga, Ripple’s Chief Legal Officer, Stuart Alderoty, has criticized the United States Securities and Exchange Commission (SEC) for what he calls a “hypocritical pivot.” This critique comes after years of the SEC insisting that cryptocurrency regulations are clear and must be obeyed. The latest developments in this ongoing legal battle center around the SEC’s request for the Second Circuit to review the application of the Howey Test and Ripple’s recent acquisition of Fortress Trust.
The SEC’s Appeal:
In its latest filing, the SEC acknowledges the “knotty legal problems” that have arisen in applying the Howey Test, a crucial framework used to determine whether a cryptocurrency qualifies as a security. The regulatory body argues that two separate courts within the same district have arrived at differing legal conclusions regarding Ripple’s XRP. Furthermore, similar legal questions are under consideration in other courts.
The SEC contends that permitting the appeal and issuing a stay in the case would be a prudent course of action. This, it argues, would not only benefit the SEC but also Ripple and all parties involved by conserving valuable resources. Additionally, the SEC suggests that an appeal could open the door for Ripple to seek a review from the Appeal Court regarding institutional sales of XRP. The SEC suspects that Ripple’s opposition to the appeal might be a strategy to continue selling XRP, a claim that has sparked criticism from other stakeholders.
Criticism of the SEC’s Argument:
Not everyone is convinced by the SEC’s arguments. Attorney James Fillan has described the SEC’s claim that a stay of proceedings would conserve resources as “laughable.” This divergence of opinions highlights the complexity and contentious nature of the legal issues surrounding Ripple and XRP.
Ripple’s Recent Acquisition:
Despite the ongoing legal challenges, Ripple announced the completion of its purchase of Fortress Trust, a Web3 infrastructure startup. While the exact amount of the acquisition remains undisclosed, Ripple stated that this acquisition would expand its regulatory licenses to include a Nevada Trust license. Ripple already holds a New York BitLicense, over 30 Money Transmitter Licenses across the United States, and an in-principle Major Payment Institution License in Singapore.
Monica Long, Ripple’s President, expressed her belief that this acquisition would enable the company to provide exceptional customer experiences for enterprises using its crypto infrastructure solutions. Ripple’s CEO, Brad Garlinghouse, echoed this sentiment, stating that Fortress Trust would accelerate their business and strengthen their position in the crucial aspects of crypto infrastructure.
Read More: Why Grayscale Ethereum Trust Discount Hit Yearly Low
Market Impact:
Surprisingly, these legal and business developments have had minimal impact on the price performance of XRP. The digital asset has seen a modest 0.75% increase, trading at $0.5027 as of the time of writing.
Conclusion:
Ripple’s legal battle with the SEC continues to evolve, with both parties making their cases and seeking advantages. The cryptocurrency community watches closely as this high-stakes legal drama unfolds, as its outcome could have significant implications for the broader crypto industry and the regulatory landscape. In the midst of these challenges, Ripple remains committed to expanding its business and providing innovative solutions to enterprises in the world of cryptocurrency.
