As the verdict in the high-profile lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC) nears, many experts are eagerly waiting for the outcome, which could shape the future of cryptocurrency regulation in the United States.
We are expecting the case could soon reach a conclusion, with Judge Analisa Torres set to make a key ruling on summary judgment in the coming days. As the industry waits with bated breath, a FOX Business journalist, Eleanor Terrett, has brought a new perspective to the case.
Symbolic Billboard Sends Message to SEC
Ripple, one of the largest names in the crypto industry, has been embroiled in a lawsuit with the SEC for nearly two years, with the outcome expected to have far-reaching implications for the sector.
Terrett says that the case centers on allegations that Ripple and its executives violated securities laws by selling the digital token XRP to bankroll its business without registering it as a security. Ripple has denied the allegations, arguing that XRP is not a security.
As the case has progressed, the crypto industry has been left in a regulatory void, with questions surrounding which regulator should oversee digital assets and how they should be classified.
However, a recent symbolic move by Ripple has sent a clear message to the SEC that the company is not backing down. A large blue billboard with the words “Crypto Means Business” and Ripple’s name has been placed in Union Station, on the route taken by commuting securities lawyers on their way to the SEC’s headquarters.
Judge Torres’ Previous Rulings
Over the course of the case, Judge Torres has made various rulings that have given hope to Ripple supporters. For example, she has sided with Ripple on motions demanding emails and other documents from SEC officials, which could show that the agency unfairly targeted Ripple.
However, with recent collapses in the crypto industry, including the implosion of the Terra blockchain platform and the collapse of the FTX crypto exchange, experts are unsure which way the judge will rule.
Digital Asset Classification
One of the main reasons the outcome of the case is so important is that there has been no formal classification of digital assets, says Terrett.
Currently, their legal status is open to interpretation by the SEC and the Commodity Futures Trading Commission (CFTC), leading to a turf war over which regulator should oversee the asset class.
The ruling could also decide whether the SEC’s Howey Test, which determines what qualifies as an investment contract and is subject to US securities laws, should apply to digital assets.