On Thursday, a decision was made by a U.S. judge that proclaimed XRP token purchases made via exchanges were not investments in securities. This strengthens the legal case presented by Coinbase in its dispute against the SEC, according to Paul Grewal, Coinbase's chief legal officer. In June, the SEC filed a lawsuit against Coinbase, accusing it of offering services on an unregistered exchange and as a broker.
On Thursday, a U.S. court ruling that XRP purchases made via exchanges were not securities transactions provided grounds for strengthened arguments in Coinbase's legal case against the U.S. Securities and Exchange Commission, the exchange's Chief Legal Officer Paul Grewal disclosed in a CNBC interview on Friday.The decision was welcomed by cryptocurrency circles and especially exchanges, which see it as a step towards much-needed regulatory clarity. According to Grewal, Coinbase believes that the ruling has bolstered their case, despite the SEC law suit filed against the organization in June.The XRP opinion has given the organization confidence that securities laws may not be applicable in each and every transaction. Nevertheless, the judgement considered sales of XRP to professional investors or institutional customers as securities transactions.
Coinbase has attempted to expand its institutional trading platform. Regarding the subject of the case, which referred to how Ripple distributed XRP to institutional customers, Grewal was unperturbed. He responded "I think all investors, both institutional and those in the retail market, can be confident that within the context of exchanges, which involve arm's length dealings, the court has indicated that these tokens are not regarded as securities."
It is crucial to establish whether cryptoassets constitute securities or not, since this carries many implications. If these assets are labeled as such, they must be registered in the SEC and comply with stringent disclosure rules. Moreover, the SEC would then have the authority to supervise them and entities such as crypto exchanges. The Commission has historically maintained that the majority of digital currencies are securities, though their ruling on XRP appears to weaken their case. During the past couple of weeks, the crypto industry has harshly criticized the SEC for not working collaboratively and for relying solely on enforcement regulations.
Tyler Winklevoss, who is a part of the co-founding team of the cryptocurrency exchange Gemini, which is subject to a lawsuit from the Securities and Exchange Commission (SEC), remarked that the regulator is a "failed institution." Coinbase's Grewal stated that he does not believe the SEC has an agenda against the cryptocurrency industry, asserting that the SEC's conduct has been conducted in "good faith." At the same time, he went on to mention that "[they] have been wrong." He furthered by saying that the SEC is responsible for a "failure of leadership" in terms of working with the industry and other stakeholders instead of solely resorting to court. Grewal concluded by pushing for the establishment of "new rules to deal with a new technology."
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