According to Cointelegraph, the United States Securities and Exchange Commission (SEC) is turning its attention towards establishing a comprehensive regulatory framework for cryptocurrencies following the conclusion of a significant legal battle in the industry. The SEC and Ripple Labs have ended their nearly five-year legal dispute, with both parties agreeing to drop their appeals and cover their own legal costs, as per a filing with the Second Circuit Appeals Court last Thursday.
SEC Commissioner Hester Peirce described the resolution as a "welcome development," emphasizing that the conclusion of the case allows for a shift in focus from litigation to policy creation. SEC Chair Paul Atkins echoed this sentiment, stating that the closure of this chapter provides an opportunity to concentrate on drafting a regulatory framework that encourages innovation while safeguarding investors. The legal battle began in December 2020 when the SEC accused Ripple of raising $1.3 billion through unregistered XRP securities sales. In July 2023, Judge Analisa Torres ruled that XRP was not a security when sold to retail investors but was considered a security in institutional sales. Ripple was subsequently fined $125 million in August 2024.
The resolution of the case coincides with legislative efforts to advance the Digital Asset Market Clarity Act, also known as the CLARITY Act, which seeks to define the structure of digital asset markets. Republican lawmakers and the Senate Banking Committee are pushing to pass the bill by September 30, despite facing resistance from Democratic Party lawmakers. In July, prominent Democratic members of the House of Representatives announced their opposition to Republican efforts to pass what they termed "dangerous" legislation, highlighting the growing political divide. House Financial Services Committee ranking member Maxine Waters criticized the CLARITY Act and the Anti-CBDC Surveillance State Act, which aims to prevent the launch of a U.S. central bank digital currency, accusing Republicans of fast-tracking risky crypto legislation through Congress.
