Regulators are still figuring out how to oversee crypto, but some recent judicial rulings show promise for the industry’s legal battles with the US Securities and Exchange Commission (SEC).
Bill Morgan, an attorney representing Ripple in its protracted legal battle with the SEC, has been vocal about the evolving judicial stance on crypto. His recent comments underline a changing tide in the interpretation of digital assets and a seeming divergence from the SEC’s traditionally stringent perspective.
Judge’s Affirmation Of BTC And ETH As Commodities
In the thick of several lawsuits against crypto firms, the courts have shown a trend of contradicting the SEC’s assertions. An instance of this is Judge Katherine Polk Failla’s recent ruling.
The decentralized exchange, Uniswap Labs, was embroiled in accusations of fraud by six individuals who claimed to lose funds from scam tokens on the platform.
Despite these claims, Judge Failla dismissed the lawsuit against Uniswap. In her dismissal order dated August 30, she asserted that leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), are commodities, not securities under US laws. Judge Failla stated:
The Court finds that the smart contracts here were themselves able to be carried out lawfully, as with the exchange of crypto commodities ETH and Bitcoin.
Recognizing leading digital assets as commodities is a notable deviation from the SEC’s position. The SEC has been clear that Bitcoin is a commodity from their perspective, but it’s more obscure regarding Ethereum.
Judge Affirms XRP’s Non-Security Status
Further solidifying the changing judicial outlook is Judge Analisa Torres’ verdict over Ripple Labs. The landmark ruling declared that the secondary sales of XRP to retail investors should not be classified as securities.
Reinforcing this sentiment, Morgan emphasized, “XRP itself is not a security.” This perspective is crucial for Ripple, which has been at loggerheads with the SEC over the classification of the digital token.
Morgan’s belief extends beyond Ripple’s case. He predicts that the SEC will likely face defeat in “the three big cases that count,” pointing to the legal battles involving Ripple Labs, Grayscale Investments, and Coinbase.
It is important to note that these judicial stances have significant implications. They not only shape current and future legal battles in the crypto industry but they can influence the current regulatory framework.
With prominent figures such as Bill Morgan shedding light on these rulings, it seems the US courts are progressively recognizing the nature of cryptocurrencies, setting a precedent that could influence future regulatory discussions globally.
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