The Third District Circuit ruled in partial favor of Coinbase in its regulatory dispute case with the U.S. Securities and Exchange Commission (SEC). This decision, Ripple $2.6 and the SEC led to comments that could set a precedent and provide clarity on cryptocurrency regulations.
Decision Against SEC
The Third Circuit held that the SEC was wrong to dismiss Coinbase’s regulatory arguments. The appeals court asked the regulator to provide clear clarifications on the rules and guidelines that define crypto assets as securities.
James Murphy stated that any rule-making activity by the SEC should wait for Congress to pass legislation that will determine the structure of the markets for cryptocurrency regulations in the US to be clarified.
Fred Rispoli responded to Paul Grewal’s post sharing Coinbase’s success, stating that the court wanted the SEC to explain its reasons for rejecting it.
“The regulatory legacy rules are inappropriate for crypto and the enforcement strategy raises constitutional issues.”
James Farrell emphasized that the court should provide adequate disclosure regarding digital assets that the SEC classifies as securities. But he also noted that some crypto assets are creative schemes to bypass securities regulations.
Lawyers state that the Third Circuit decision could be applied in other courts with similar arguments and could show that the SEC did not regulate in good faith.
The crypto industry is awaiting the SEC’s lead petition in the case between Ripple and the SEC. Lawyers are weighing the possibility of crypto-friendly officials in the Trump administration ending this case.
What to Expect in the Ripple and SEC Case
The effects of Coinbase’s partial victory with the SEC on the Ripple case are a matter of curiosity. The SEC opening petition to be published is expected to determine the course of the case.
These days, Gensler is making statements before leaving his post and touching on the risks of cryptocurrencies. However, since the new SEC Chairman is a crypto-friendly name, things may get easier. Considering details such as Trump’s sympathy for the Ripple team and his respect for his role as the representative of crypto innovation, crypto cases other than fraud need to end. And of course, the ongoing XRP Coin appeal process is one of them.
The outcome of the Ripple and SEC case could be a major turning point in the regulation of cryptocurrency markets.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
