The U.S. Securities and Exchange Commission (SEC) is expected to pause its long-standing lawsuit against Ripple, following delays in its cases against Coinbase and Binance. This development marks a possible shift in the SEC’s approach to regulating the cryptocurrency space.
According to former SEC official John Reed Stark, the agency’s recent actions—requesting delays in its legal proceedings against major crypto firms like Coinbase and Binance—signal a broader change in its enforcement strategy. This change may extend to the Ripple case, which has been ongoing for several years over whether XRP should be classified as a security.
In a Friday update, the SEC informed the Second Circuit Court that a new Crypto Task Force could lead to a resolution in its case against Coinbase. This prompted the SEC to request a delay in responding to Coinbase’s appeal regarding the application of securities laws to transactions on its platform. A similar delay was requested in the Binance case last week, with both parties agreeing to pause proceedings while the SEC reassesses its stance on digital assets.
The SEC’s crypto-related unit has been rebranded from the “Crypto Assets and Cyber Unit” to the “Cyber and Emerging Technologies Unit,” which Stark believes points to a potential slowdown in crypto investigations and litigation.
Legal experts speculate that these delays could lead to settlements or dismissals of cases in the crypto space, marking a shift from the aggressive enforcement approach under previous leadership. Additionally, key SEC trial lawyers involved in these cases have been reassigned, further supporting the idea of a retreat from earlier, more stringent legal tactics.
As the Ripple lawsuit continues, many believe that the SEC may seek a settlement before approving an XRP exchange-traded fund (ETF), a move that could end the ongoing legal battle. Speculation about an imminent settlement has gained momentum as the probability of an XRP ETF approval continues to rise.
The Ripple case centers on whether XRP qualifies as a security, with a partial ruling in 2023 determining that XRP was not a security in some transactions. However, the SEC continues to challenge that decision. If the SEC follows the pattern set in its cases against Coinbase and Binance, a pause or settlement in the Ripple lawsuit may be on the horizon.
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