💪Crypto Fighting Back Against the SEC!
The crypto industry launches lawsuits against the SEC and Ripple files a cross appeal
Hey Thinkers 💡
🚨 Crypto Industry Update: The SEC Bites Off More Than It Can Chew 🚨
This week, the tension between the U.S. Securities and Exchange Commission (SEC) and the cryptocurrency industry has reached a boiling point. Major players in the crypto space are pushing back, and it seems like the SEC may have underestimated the resistance. Here are the key stories that unfolded this week:
💼 Companies Sue the SEC
Crypto.com has taken the bold step of suing the SEC, claiming the federal agency is overstepping its authority. This action follows the receipt of a "Wells notice," where the SEC suggested that tokens traded on the Crypto.com platform qualify as securities.
Kris Marszalek, Crypto.com’s CEO, tweeted:
“This unprecedented action by our company against a federal agency is a warranted response to the SEC’s regulation by enforcement regime, which has hurt more than 50 million American crypto holders."
In a strategic move to clarify regulations around crypto derivatives, Crypto.com has also filed a petition with both the Commodity Futures Trading Commission (CFTC) and the SEC to confirm how crypto derivative products should be classified.
Similarly, Bitnomial Exchange has jumped into the fight, filing its own lawsuit against the SEC. Bitnomial is aiming to block the SEC from asserting joint jurisdiction over its XRP futures contracts, which are currently regulated by the CFTC. The SEC, however, contends that these contracts are "security futures," but Bitnomial argues that a court ruling has already determined XRP is not a security.
⚖️ Ripple Takes on the SEC’s Appeal
In the ongoing saga between Ripple and the SEC, Ripple has filed a cross-appeal against the agency. According to Stuart Alderoty, Ripple's Chief Legal Officer:
“The SEC lost on all key points—that’s why they appealed. Today, Ripple filed a cross-appeal to ensure nothing’s left on the table.”
Alderoty highlights the SEC’s failure to contest the ruling that XRP itself is not a security, which remains the law, and he expressed confidence that Ripple will prevail in further court challenges. The SEC had previously tried and failed to appeal rulings about Ripple’s XRP sales and distributions not being classified as securities. Ripple is eager to bring the fight to a higher court to finally end what it sees as an unjust campaign against the industry.
📢 Coinbase Leverages SEC’s Ripple Appeal
Coinbase, in a strategic move, is using the SEC’s Ripple appeal to bolster its own legal case. The exchange is pushing for an interlocutory appeal, a rare move, which would bring the Howey Test’s application to secondary market sales into clearer focus at a higher court level. The SEC’s Ripple appeal strengthens Coinbase’s argument, and if granted, this could have a significant impact on the future of crypto regulation in the U.S.
💥 Commissioner Mark Uyeda Slams Gary Gensler
The internal conflict within the SEC has also come to light, as Commissioner Mark Uyeda openly criticized SEC Chair Gary Gensler’s handling of crypto regulation. In an interview with Fox Business, Uyeda called the SEC's approach to crypto regulation "a disaster for the whole industry," contradicting Gensler’s claims that the rules are clear. This division within the SEC could further complicate the agency’s position as it faces mounting legal challenges from the crypto industry.
Watch the clip
Also, as highlighted in the newsletter on Monday, the Trump camp released replacement candidates for SEC Chair Gary Gensler.
It’s clear that the crypto industry is no longer standing idly by as the SEC attempts to regulate through enforcement. With major lawsuits, cross-appeals, and criticism even from within the agency itself, this battle is far from over.
Attorney James Murphy joined me yesterday for an interview to discuss all of these topics.
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-Tony