The XRP lawsuit between Ripple Labs and the US Securities and Exchange Commission (SEC) over the status of XRP as a security is poised to escalate to the US Supreme Court. This anticipation has been reinforced by a recent ruling in the Coinbase case, which favored the SEC, as presided over by Judge Katherine Failla of the Southern District of New York.
XRP Lawsuit Going To The US Supreme Court?
Ladan Stewart, former chief of the SEC’s crypto litigation unit, spoke on a panel at Columbia Business School, revealing these insights into the agency’s regulatory stance and future directions. Despite leaving the SEC, Stewart’s comments still reflect deep ties to the agency’s strategies and their implications for the crypto industry.
During the panel, Stewart acknowledged the impact of Judge Failla’s decision in the Coinbase case, stating, “It’s probably going to give the SEC that sort of comfort it needs to proceed as it has been,” and reinforced that the agency “is not going to back off of bringing regulatory cases in the crypto space.”
Notably, she also reinforced the likelihood of one of the lawsuits brought against companies like Ripple and Coinbase ascending to the Supreme Court to resolve fundamental questions about the definition of securities within the crypto space, as Fortune reports. “Then there will be some definitive sort of clarity on that question,” Stewart said.
The discussion also covered the broader implications of how digital assets are treated under US law, highlighting ongoing disputes about whether tokens themselves are securities, or if it is the manner of their sale that creates an investment contract. Stewart clarified, “The underlying asset is not a security, but its offer and sale.”
Panelists including Rebecca Rettig from Polygon and Lewis Cohen from DLx Law provided contrasting views. Rettig, legal counsel for Polygon, pressed Stewart on practical implications, specifically asking, “But then what do you register?” Stewart’s response that both the token and “all the stuff around the token” are considered for security status, did not satisfy panelists, highlighting a persistent area of contention between the crypto industry and regulatory bodies.
Lewis Cohen of DLx Law argued that the SEC’s approach might lead to regulation by enforcement—a criticism often levied by crypto advocates. Cohen questioned the practical application of securities law as interpreted by Judge Failla in the recent Coinbase ruling, suggesting it may not align with the realities of digital asset markets.
The discussion underscored a fundamental industry dilemma: how can crypto companies operate within the law if the rules remain unclear or impractical? This question remains at the heart of ongoing disputes and is central to the broader dialogue around the future of crypto regulation.
Stewart’s final comments at the event underscored the civil but charged nature of these discussions, “We’re all friends,” she concluded, marking a polite yet firm acknowledgment of the ongoing debates that are likely to shape the future of crypto regulation in the United States.
Ripple’s CEO, Garlinghouse, has previously expressed a firm commitment to battling the SEC over the status of XRP, declaring, “We are in it till the end.” Additionally, Stuart Alderoty, the Chief Legal Officer at Ripple, noted last year that the Supreme Court has consistently decided against the SEC in various cases over recent years.
At press time, XRP traded at $0.49659.
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