After a monumental ruling in the legal battle between the United States Securities and Exchange Commission (SEC) and blockchain company Ripple, which acknowledged that XRP was not a security, legal expert John E. Deaton has weighed in on what this means for the regulator’s future practice.
Indeed, Deaton said that Judge Analisa Torres’s rejection of the SEC’s claim, in which it referred to all XRP sales as unregistered securities transactions, proved that the finance watchdog needed to modify its approach to cryptocurrencies, as he explained in a Bloomberg Law opinion piece published on July 17.
Embarrassing loss for SEC
According to the pro-XRP lawyer and amicus curiae for Ripple during the court proceedings, the decision was “a total victory” for digital asset holders and crypto developers in the US and “a devastating blow to the SEC’s ambition to bring an entire asset class under its thumb.”
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“Had the SEC brought the case along the lines of Torres’ ruling, it likely would have settled in weeks and wouldn’t have become the target of the entire crypto community. (…) Now the regulator has a humiliating loss on its hands,” Deaton writes.
Furthermore, the legal expert commented on the SEC’s recently filed lawsuit against Coinbase, one of the largest crypto exchanges in the world, which, in his words, “rides on the same legal theory [that all tokens except for Bitcoin (BTC) are unregistered securities] and could be another high-profile embarrassment.”
Earlier, attorney Jeremy Hogan also shared his opinion on the aftermath of the case, arguing that he did not believe either of the two sides would appeal after the trial and final judgment, especially not the SEC, which, in his view, stands to lose more than gain by appealing the decision, as Finbold reported on July 17.
Failure to protect investors
Finally, Deaton believes that the agency, in its desire to regulate crypto, has moved away from its primary goal, which is to protect investors, as a result hurting “millions of retail digital asset holders who needed Torres to protect them from its legal assault on XRP.”
“If the SEC doesn’t reevaluate its whole regulatory approach to crypto after Ripple, it will waste taxpayer dollars and fail the American people,” he concluded.
Meanwhile, the XRP token that was at the center of the whole ordeal is currently changing hands at the price of $0.74, which represents a decline of 0.92% in the last 24 hours but still an advance of 55.71% across the previous seven days and a 53.65% gain on its monthly chart, as per data retrieved on July 18.
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