The recent ruling by the U.S. Court of Appeals for the Third Circuit in the Coinbase lawsuit has sparked discussions about its potential impact on the ongoing Ripple vs SEC case. Lawyers tracking the case suggest that the decision could set a precedent for how digital assets are classified and regulated, potentially benefiting Ripple.
Key Takeaways from the Coinbase Ruling
The Third Circuit Court ruled partially in favor of Coinbase in its petition against the U.S. Securities and Exchange Commission (SEC), challenging the SEC’s refusal to establish clear guidelines on whether digital assets like cryptocurrencies are considered securities. The court instructed the SEC to provide a detailed explanation of its rationale for denying Coinbase’s rulemaking petition.
The ruling has significant implications for the Ripple case. Pro-XRP lawyers, including Fred Rispoli, believe that if the 2nd Circuit Court follows the reasoning of Judge Bibas from the Third Circuit, the SEC may face substantial setbacks in its regulatory approach towards crypto. Rispoli suggests that the SEC’s failure to adapt its old regulations to modern technology and provide clear guidelines could lead to the dismissal or delay of the SEC’s appeal in the Ripple case.
Implications for the Ripple Case
The Ripple vs SEC lawsuit has drawn significant attention, with the crypto community awaiting the SEC’s principal appeal. Legal experts believe that if the SEC’s arguments are similar to its handling of Coinbase, the commission may struggle to justify its position in the Ripple case. The SEC has until January 15 to submit its opening brief in the appeal.
Former SEC lawyer James Farrell noted that the SEC’s failure to choose and clearly explain one of its rationales in the Coinbase case could weaken its argument in Ripple’s lawsuit. Moreover, the industry’s growing expectation is that the SEC might have to adjust its regulatory stance as lawmakers like Paul Atkins, under the Trump administration, are pushing for clearer crypto market structures.
Looking Ahead
As the legal battle unfolds, the Ripple case could be influenced by the broader debate on crypto regulations. The courts’ willingness to adopt the Coinbase ruling’s reasoning could pave the way for clearer regulations and a more favorable outcome for Ripple, possibly weakening the SEC’s authority in crypto-related lawsuits.
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