US Courts’ Changing Stance on Crypto Offers Hope for Industry’s Legal Battles with SEC
Recent judicial rulings in the United States suggest a glimmer of hope for the cryptocurrency industry in its legal battles against the US Securities and Exchange Commission (SEC). These court decisions indicate a shift in the interpretation of digital assets, which diverges from the SEC’s traditionally strict perspective.
Bill Morgan, an attorney representing Ripple in its ongoing legal dispute with the SEC, has been vocal about the evolving judicial stance on cryptocurrencies. He highlights the changing tide in the understanding of digital assets and a departure from the SEC’s stringent approach.
Several lawsuits involving crypto companies have seen the courts contradicting the SEC’s claims. A notable example is Judge Katherine Polk Failla’s recent ruling. The decentralized exchange Uniswap Labs faced accusations of fraud from six individuals who claimed to have lost funds to scam tokens on the platform.
However, Judge Failla dismissed the lawsuit against Uniswap, stating in her order on August 30 that leading cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) are commodities, not securities, under US law. She emphasized that the smart contracts involved in the case were conducted lawfully, citing the exchange of crypto commodities ETH and Bitcoin.
This recognition of major digital assets as commodities represents a significant departure from the SEC’s position. While the SEC acknowledges Bitcoin as a commodity, its stance regarding Ethereum remains somewhat ambiguous.
Another key ruling that strengthens the changing judicial outlook is Judge Analisa Torres’ verdict on the case involving Ripple Labs. The landmark decision concluded that the secondary sales of XRP to retail investors should not be classified as securities. Bill Morgan reiterated this perspective, asserting that XRP itself is not a security. This viewpoint holds considerable importance for Ripple, as it has been engaged in a contentious battle with the SEC over the classification of its digital token.
Morgan predicts that the SEC is likely to face defeat in the three big cases that count, referring to the legal disputes involving Ripple Labs, Grayscale Investments, and Coinbase.
These judicial stances hold significant implications as they shape present and future legal battles within the cryptocurrency industry and have the potential to influence the current regulatory framework.
The recognition from prominent figures like Bill Morgan highlights the progressive acknowledgment of cryptocurrencies by US courts, setting a precedent that may influence future regulatory discussions on a global scale.
