Ripple vs. SEC: Battle Lines Drawn as Crypto Community Reacts to Latest Hearing

XRP Gains Favor as the "Digital Asset with Legal Clarity

The cryptocurrency world is buzzing with commentary on the recent Coinbase hearing, where the SEC’s remarks reignited the Ripple lawsuit battleground.

SEC Criticizes Torres Ruling

In a tweet highlighting the hearing, journalist Eleanor Terrett reported the SEC criticizing Judge Torres’s decision in the Ripple case. The crux of the criticism boils down to the judge’s distinction between Ripple’s programmatic sales on exchanges (not deemed securities) and institutional sales (deemed securities). The SEC argues that regardless of investor sophistication, buying the same token should fall under the same securities laws.

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Deaton Weighs In XRP community attorney John Deaton countered by pointing out that Torres followed the SEC’s complaint, which categorized Ripple’s sales into different buckets. He noted that the SEC argued institutional sales constituted securities while programmatic and other distributions (giveaways, donations, etc.) did not. Deaton emphasized that Torres merely ruled by the agency’s arguments.

Terra Judge Sides with SEC

Adding fuel to the fire, Judge Rakoff, who presided over the SEC’s lawsuit against Terraform Labs, echoed the SEC’s criticism. He disagreed with Torres’s distinction between investor types, stating that the Howey test doesn’t differentiate based on coin origin. This further validates the SEC’s stance challenging Torres’s ruling.

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Appeals on the Horizon?

The SEC’s arguments in the Coinbase hearing suggest a potential appeal of the Ripple decision once Torres issues her final judgment. They’re pushing for additional financial disclosures from Ripple related to its institutional sales data. With discovery nearing its end, a final decision could come as early as summer.

Ripple Awaits Final Judgment

Ripple is preparing its response to the SEC’s latest motion and awaiting the final judgment. Whether the SEC chooses to appeal or seek a settlement remains to be seen, but the recent developments indicate a potentially long and contentious legal battle ahead.

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