The countdown has begun for the end of Gary Gensler’s term as Chair of the US Securities and Exchange Commission (SEC), with all eyes now on the agency’s upcoming filing deadline in the ongoing legal battle with Ripple. The SEC is expected to submit its opening brief before January 15, following an extension granted by the 2nd Circuit Court of Appeals.
As Gensler prepares to hand over the reins to Paul Atkins, former SEC lawyers Marc Fagel and James Farrell have confirmed that the agency is moving forward with its appeal in the Ripple lawsuit. Despite speculation surrounding potential shifts in the agency’s stance post-Gensler, analysts believe that Chief Litigation Counsel Jorge Tenreiro’s groundwork will continue to drive the case forward. Tenreiro is expected to stay on as the plaintiff, with rumors suggesting that he may provide a briefing before the upcoming deadline.
The SEC’s appeal stems from Judge Analisa Torres’ ruling, which did not definitively classify XRP as either a security or a commodity. The regulator’s focus is on secondary sales of XRP, including transactions on crypto exchanges, employee distributions, and sales by Ripple executives Brad Garlinghouse and Chris Larsen.
Legal experts, including pro-XRP attorney John E. Deaton, have raised concerns about the lawsuit’s impact on Ripple’s business. Deaton criticized the SEC’s complaint as overly broad and suggested that the agency’s actions may be part of a larger effort to undermine the company and its digital assets.
Ripple’s Chief Legal Officer, Stuart Alderoty, has also voiced worries about the SEC’s overreach in attempting to regulate cryptocurrencies beyond its jurisdiction. Alderoty emphasized the need for the SEC to stick to regulating securities transactions and cautioned against expanding its oversight to other types of digital assets.
With Gensler’s departure on the horizon, many in the crypto community are hopeful for a change in direction under incoming SEC Chairman Paul Atkins. Legal experts believe that the lawsuit may see resolution under Atkins’ leadership, given his pro-crypto stance. Atkins is expected to bring a clearer and more balanced approach to regulating digital assets.
Recent statements by SEC Commissioner Hester Peirce indicate a shift away from a “regulation-by-enforcement” approach, which could impact the resolution of the Ripple case. Peirce emphasized the need for a more proactive approach to cryptocurrency regulation, suggesting that the SEC has a range of tools at its disposal that must be used judiciously.
As the Ripple lawsuit unfolds, XRP’s price has experienced some fluctuations, currently trading around $2.40 with a slight uptick in the last 24 hours. However, trading volume has decreased by 13%, possibly indicating investors holding positions ahead of the January 15 court session. Additionally, XRP futures open interest has risen by 6%, hinting at potential upward momentum in the near future.
The outcome of the Ripple lawsuit and the SEC’s approach to cryptocurrency regulation could have significant implications for the broader digital asset landscape. Stay tuned as the legal battle continues to unfold.