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SEC Drops Appeal Against Ripple, XRP Tokens Considered Digital Commodities
According to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) has decided to drop its appeal against Ripple, marking a significant development in the ongoing legal saga. Crypto lawyer John Deaton emphasized that this move underscores the classification of XRP tokens as digital commodities rather than securities. Despite this, Ripple still faces a $125 million judgment related to the improper sale of XRP, which the company might now negotiate down following the SEC's decision.
Deaton, who has been a prominent advocate for XRP holders, argued that their interests were not adequately represented in the SEC's case against Ripple. He later ran for a Senate seat against Elizabeth Warren, a known critic of cryptocurrency, to represent Massachusetts in Washington, D.C. A key issue moving forward is Ripple's cross-appeal, filed in October 2024. Deaton suggests that the SEC is keen to avoid this cross-appeal, as a ruling could potentially limit the commission's jurisdiction and impact other cases. This situation provides Ripple with leverage in settlement negotiations. Deaton remarked on the shifting landscape, noting changes in the industry, the SEC's stance, and the political environment, questioning the necessity of the $125 million payment.
However, Ripple still faces an injunction from Judge Analisa Torres, which restricts the company from selling XRP to institutional investors to prevent securities law violations. Deaton highlighted the challenge Ripple faces in overcoming this injunction if it intends to issue XRP directly to American banks. Reflecting on the broader implications of the case, Deaton described it as an attack on the cryptocurrency industry, likening it to a "boot on the neck" of the sector. He expressed confidence that the case was not an isolated incident but part of a broader message from traditional finance and regulatory figures like Elizabeth Warren and Gary Gensler.
Deaton also pointed out that Ripple's continued presence in the U.S. throughout the legal proceedings could work in its favor. He noted that Ripple's CEO, Brad Garlinghouse, could argue that despite being sued by the U.S. government and the Biden administration, Ripple remained an American company. This steadfastness, Deaton believes, could be advantageous for Ripple as it navigates the legal and regulatory landscape.
Deaton, who has been a prominent advocate for XRP holders, argued that their interests were not adequately represented in the SEC's case against Ripple. He later ran for a Senate seat against Elizabeth Warren, a known critic of cryptocurrency, to represent Massachusetts in Washington, D.C. A key issue moving forward is Ripple's cross-appeal, filed in October 2024. Deaton suggests that the SEC is keen to avoid this cross-appeal, as a ruling could potentially limit the commission's jurisdiction and impact other cases. This situation provides Ripple with leverage in settlement negotiations. Deaton remarked on the shifting landscape, noting changes in the industry, the SEC's stance, and the political environment, questioning the necessity of the $125 million payment.
However, Ripple still faces an injunction from Judge Analisa Torres, which restricts the company from selling XRP to institutional investors to prevent securities law violations. Deaton highlighted the challenge Ripple faces in overcoming this injunction if it intends to issue XRP directly to American banks. Reflecting on the broader implications of the case, Deaton described it as an attack on the cryptocurrency industry, likening it to a "boot on the neck" of the sector. He expressed confidence that the case was not an isolated incident but part of a broader message from traditional finance and regulatory figures like Elizabeth Warren and Gary Gensler.
Deaton also pointed out that Ripple's continued presence in the U.S. throughout the legal proceedings could work in its favor. He noted that Ripple's CEO, Brad Garlinghouse, could argue that despite being sued by the U.S. government and the Biden administration, Ripple remained an American company. This steadfastness, Deaton believes, could be advantageous for Ripple as it navigates the legal and regulatory landscape.
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XRP
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