Regulation
SEC Targets Ripple Again, Stablecoin Launch Could Be Threatened
On May 7, 2024, a significant development occurred in the ongoing legal saga between Ripple Labs and the United States Securities and Exchange Commission (SEC). According to a document shared publicly by defense attorney James Filan, the SEC submitted a redacted response brief on the appeals, as well as supporting exhibits against Ripple Labs, Bradley Garlinghouse (CEO of Ripple), and Christian A . Larsen (co-founder of Ripple).
In its latest filing, the SEC still claims that Ripple’s primary business is selling XRP without registration. Many believe this could further affect US cryptocurrency regulations.
Is Ripple’s Next Stablecoin in Danger?
The SEC document claims that Ripple’s primary business has been selling unregistered XRP since 2013. It also highlights Ripple’s plans to launch a new crypto asset.
“Ripple’s core business remains […] unregistered sales of XRP. […] It also plans to issue a new unregistered crypto asset,” the SEC wrote.
Many believe that this asset is The stablecoin planned by Ripple. BeInCrypto reported in early April that Ripple announced plans to launch a cryptocurrency pegged to the US dollar. stable coin.
Learn more: Everything you need to know about Ripple vs SEC
Ripple said U.S. dollar deposits and short-term U.S. government securities would support the stablecoin. However, the name of the asset and the launch date are still unknown.
Stuart Alderoty, Ripple’s chief legal officer, expressed disdain for the SEC’s continued legal pressure. He criticized the SEC for failing to apply the law precisely and accused it of trying to mislead the court. However, Alderoty remains optimistic that the lawsuit will be resolved and is critical of the SEC’s disregard for international regulatory frameworks.
“We are confident that the Court will approach the appeals phase in a fair manner. And just when you think the SEC can’t go any lower, if you’re a financial regulator outside the US and have worked hard to establish comprehensive crypto licensing frameworks, know that the SEC doesn’t ‘has no respect for you and thinks you give the equivalent of fishing licenses’, Alderoty declared.
The development comes as the SEC steps up its scrutiny of the cryptocurrency industry. He recently issued Wells opinions to major crypto players including Uniswap, Consensys and Robinhood.
SEC Chairman Gary Gensler explained his strategy in a recent CNBC interview. It aims to bring the crypto industry faces stricter regulation.
Gensler highlighted the SEC’s role in overseeing a $110 trillion capital market. He highlighted the important but problematic role of cryptocurrencies.
Meanwhile, Gensler did not give a clear answer to the question of whether Ethereum (ETH) is a commodity or security. Instead, he highlighted the lack of necessary disclosure to investors. Additionally, he criticized the practices of intermediaries in centralized crypto markets.
“How can we ensure that the American investor is protected? And as of now, they are not getting the required or necessary information. And the middlemen at the center of this rather centralized market are generally in conflict and doing things that we would never allow the New York Stock Exchange to do. The New York Stock Exchange is not allowed to trade against investors,” Gensler said.
Learn more: What does it mean to receive a Wells Notice from the SEC?
The SEC Chairman’s comments highlight the crypto industry’s challenges. He considers that the industry is subject to scams and fraud. The SEC aims to ensure full disclosure and legal compliance of all crypto transactions and offerings.
With assurance from the SEC, the crypto industry awaits regulatory clarification. These could reshape its operations and impact global market trends. This case tests the balance between crypto innovation and regulatory mandates to protect investors and maintain market integrity.
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