The recent court ruling in the high-profile US Securities and Exchange Commission (SEC) case against Ripple has sparked a new wave of optimism among major players in the cryptocurrency industry, particularly Coinbase.
The landmark decision, which hailed purchases of XRP tokens via cryptocurrency exchanges as non-securities-related transactions, likely bolsters Coinbase’s defense in the ongoing lawsuit with the Securities and Exchange Commission.
Coinbase feels confident in the case against the SEC
Coinbase’s chief legal officer, Paul Grewal, expressed the firm’s newly boosted confidence following Ripple’s decision.
According to Grewal, the court’s decision significantly undermines the notion of securities being traded on cryptocurrency exchanges. So, offering reassurance to both Coinbase and its regular investors.
“I think we will win. Now, I thought we would win before this decision. We think this decision has only strengthened the cause,” Grewal stated.
The Coinbase CEO suggested that the logic of the ruling would still hold, even if the XRP token was replaced by any other cryptocurrency.
However, the ruling also referred to the sale of XRP to sophisticated investors or institutional clients as a securities transaction. It appears to have overshadowed Coinbase’s ambitions to expand its institutional trading platform.
However, Grewal downplayed this concern, arguing that all investors can take solace from the fact that cryptocurrency exchange-traded tokens do not qualify as securities in a hands-on situation.
Investors remain optimistic about the future of cryptocurrencies
The SEC’s stance on cryptocurrencies, with most of them considered securities, has been controversial.
Cryptocurrencies must register with the Securities and Exchange Commission (SEC) and adhere to strict disclosure requirements if they are classified as securities. This leads to a significant expansion of the SEC’s jurisdiction over these assets and related companies, such as cryptocurrency exchanges.
The ruling on XRP appears to have weakened the SEC’s argument, drawing criticism from key industry figures. Tyler Winklevoss, co-founder of cryptocurrency exchange Gemini, Criticize regulator as a “failed enterprise”. Meanwhile, Grewal called for new rules to accommodate new technology.
Analysts and investors now view Ripple’s partial victory as a positive sign for the crypto market as a whole.
According to Larry Fink, CEO of BlackRock, the global demand for cryptocurrency is growing exponentially. He asserts that cryptocurrency can act as a new international asset class that can “outpace” any appreciation in the value of fiat currency.
“If you look at the value of the US dollar, how much it has fallen over the last couple of months, how much it has appreciated over the last five years… an international crypto product could really outpace that,” Fink said.
As the dust continues to settle in the aftermath of the SEC vs. Ripple case, the cryptocurrency community is anticipating the potential ripple effects of Coinbase’s ongoing legal battle with the Securities and Exchange Commission.
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