Coinbase The legal head of the U.S. exchange told CNBC on Friday that its case for legal action against the U.S. Securities and Exchange Commission has been strengthened after a key court ruling partially sided with cryptocurrency firm Ripple.
On Thursday, a U.S. judge ruled that buying XRP tokens through exchanges is not a securities transaction. The U.S. Securities and Exchange Commission (SEC) sued Ripple, the company behind the XRP token, in 2020, accusing the company of violating securities laws.
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The ruling was welcomed by the cryptocurrency community, especially exchanges, who believe the outcome will help improve regulatory transparency.
One such exchange is Coinbase, which was sued by the U.S. Securities and Exchange Commission (SEC) in June for operating an unregistered exchange and brokerage.
but the latest Ripple The court opinion gives Coinbase confidence in the SEC case.
Paul Grewal, Chief Counsel, said: “For exchanges, for tokens listed on exchanges, and for ordinary investors, there is no question that this ruling strikes at people’s desire to trade securities in a certain way when assets are traded on exchanges. concept,” a Coinbase official said in an interview with CNBC television on Friday.
“I think we’re going to win. Right now, I think we’re going to win before this decision. We think this decision will only further strengthen the situation,” he added.
Coinbase’s optimism stems in part from the decision that XRP is not a security. If XRP hadn’t been designated as such, hundreds of other cryptocurrencies would hopefully be exempt from security laws.
“I think it’s wrong to assume that in every case, in every transaction, securities laws don’t apply. That’s never been Coinbase’s position, and I don’t think it should be anyone’s reasonable position. But if you really Doing so replaced the XRP letter with that of any other coin, and in this decision, the logic still holds,” Grewal said.
However, another part of the judgment actually sees it as a securities transaction selling XRP exclusively to sophisticated investors or institutional clients.
Coinbase has been working hard to grow its own institutional trading platform. Grewal shrugged off this part of the case because it was entirely relevant to how Ripple sold XRP to institutional clients.
“I think all investors, whether institutional or retail, can take great solace in the fact that, when traded on a fair exchange, the courts have made it clear that these tokens will not traded as securities,” Greuval said.
SEC lashes out
Whether or not a crypto asset is a security is an important question with several implications. If they are considered securities, they need to be registered with the SEC and have strict disclosure requirements. It would also give the SEC the power to oversee these assets and related companies, such as cryptocurrency exchanges.
The U.S. Securities and Exchange Commission (SEC) insists that most cryptocurrencies are securities, but the decision against XRP appears to undercut its argument.
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Tyler Winklevoss, co-founder of cryptocurrency exchange Gemini, is also being sued by the SEC, is called The regulator is a “failing institution”.
Coinbase’s Grewal said he doesn’t think the SEC is waging an ideological battle against the cryptocurrency industry, but all actions are “in good faith.” However, he added, “they were wrong.”
“In my view, leadership has failed to engage properly with industry and other stakeholders rather than resorting to the courts,” Grewal said, calling for “new rules to deal with new technologies.”