In a move that has sparked speculation and debate within the cryptocurrency community, the U.S. Securities and Exchange Commission (SEC) has reiterated its position that XRP is a security, even after a court ruling concluded otherwise. This stance comes amidst Ripple’s recent cross-appeal in its ongoing legal battle with the SEC.
SEC Remains Unyielding on XRP’s Classification
The SEC’s insistence on classifying XRP as a security has come under scrutiny, particularly following a lawsuit filed by Bitnomial, a leading crypto derivatives exchange. Bitnomial is challenging the SEC’s designation of XRP futures as “security futures,” arguing that XRP is already regulated by the Commodity Futures Trading Commission (CFTC). The exchange’s lawsuit claims that the SEC has overstepped its authority and imposed unreasonable registration requirements, especially since Ripple has not registered XRP as a security.
Bill Morgan, a pro-XRP attorney, criticized the SEC’s approach, asserting that the agency has improperly leveraged its summary judgment briefs from the Ripple case to support its claims. He emphasized that the court had rejected the notion that all XRP sales constitute securities, highlighting the token’s classification as a non-security.
Growing Discontent Within the Crypto Community
The SEC’s aggressive stance is seen by many in the crypto industry as an effort to tighten control over digital assets amid increasing resistance. Bitnomial’s lawsuit echoes broader concerns regarding regulatory overreach, especially as the CFTC already imposes significant compliance burdens on the exchange.
Ripple’s Cross-Appeal Adds Complexity
In response to the SEC’s continued assertions regarding XRP’s status, Ripple has filed a cross-appeal. This legal maneuver follows Judge Analisa Torres’ July 2023 ruling, which determined that XRP sold on secondary markets is not classified as a security. The ruling was a significant victory for Ripple and was well-received across the cryptocurrency sector.
Despite the favorable ruling, the SEC’s ongoing claims have raised questions about its intent and whether it will challenge the court’s decision in its forthcoming appeal. Recent paperwork processing by the court indicates a notice regarding a deficient appeal, with the appeal record already submitted to the U.S. Court of Appeals (USCA).
Market Reaction to Ongoing Developments
Amidst these legal developments, the cryptocurrency market has responded positively. As of the latest update, XRP’s price surged by 2.4%, reaching $0.5378, with trading volume increasing by 55% to $1.31 billion. Notably, XRP hit a peak of $0.5432 within the past 24 hours, and open interest for XRP futures grew by 4%, now totaling $713.26 million. This uptick suggests a growing confidence among market participants regarding XRP’s future.
Conclusion
As Ripple and the SEC prepare for what could be a prolonged legal battle, the SEC’s refusal to acknowledge the court’s ruling on XRP’s status has led to increased scrutiny of its regulatory authority. The crypto community remains on high alert, watching closely as the legal landscape continues to evolve, signaling an intense showdown ahead.
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