The Scoop
Landmark XRP ruling could force SEC to settle with Coinbase, says securities law professor
Sat Jul 15 2023Description
The episode covers the recent ruling in the Ripple case, the potential impact on Coinbase, ongoing legal battles, the future of crypto regulation, and collaboration within the crypto community. It explores the significance of the judge's ruling on XRP as a security, the implications for other cryptocurrencies, and the challenges faced by both Ripple and Coinbase. The episode also delves into the political dynamics surrounding crypto regulation, privacy concerns, and partnerships within the industry.
Insights
Ripple's Relative Win
Judge Torres ruled that the selling of XRP on exchanges by Ripple did not constitute the selling of securities, providing a relative win for Team Ripple.
Impact on Coinbase
The Ripple case may affect Coinbase's listing process, and there is speculation that the decision could have both positive and negative implications for Coinbase's own case against the SEC.
Crypto Regulation Uncertainty
The future of crypto regulation remains uncertain, with political dynamics and the influence of institutional interests playing a role. The major questions doctrine is seen as a strong argument in legal cases involving Coinbase, Binance, and Ripple.
Collaboration and Privacy
The crypto community emphasizes collaboration and privacy, with partnerships between projects like Amp and Zcash. However, concerns arise regarding potential regulatory changes targeting privacy technology and coins.
Bitcoin ETF Approval
The XRP case decision could potentially impact the approval of a Bitcoin ETF, with BlackRock's support increasing the likelihood of approval before the end of the year.
Chapters
- Ripple Case Ruling
- Coinbase and Ripple Cases
- Crypto Regulation and Industry Impact
- Collaboration and Privacy in the Crypto Community
Ripple Case Ruling
00:19 - 08:32
- Judge Torres ruled that the selling of XRP on exchanges by Ripple did not constitute the selling of securities.
- This ruling was a relative win for Team Ripple, although they can still appeal.
- The decision is significant and raises questions about whether XRP is a security or not.
- The SEC's flexibility going forward could be significantly curtailed if this case changes the law.
- The judge's willingness to learn about blockchain technology is a big deal.
- Historically, the Howey test has been used against scams and Ponzi schemes, but now it's being applied to a new type of economic animal like Ripple and XRP.
- The judge recognized the limited connection between Ripple and XRP, which is helpful for their case.
- This case is great for airdrops and distributions of XRP to employees as they are not considered sales of securities.
- Coinbase relisted XRP on the day of this decision as part of their litigation strategy.
- The sentiment is that this decision could mean good news for Coinbase in its own case against the SEC.
- However, there are some aspects where this precedent may work against Coinbase, such as fair notice ruling against Ripple.
Coinbase and Ripple Cases
08:02 - 15:45
- Coinbase's listing process may be affected by the Ripple case
- The SEC's calculus may change due to Coinbase's request for rulemaking
- There is an increased chance of settlement for both Ripple and Coinbase
- Ripple needs to fight and can potentially go all the way to SCOTUS
- Crypto industry is learning about securities laws and constitutional law
- Settlement would require adaptive rulemaking, exemptive relief, and guidance from the SEC
- SEC's record in crypto enforcement cases could be impacted by this case
- Institutional interests of the SEC may influence settlement decisions
- Appeal outcome could go either way for Ripple or SEC
- Resolution of the case is expected to take around a year and a half
- New SEC chairman would likely have an interest in settling cases and implementing an adaptive regime
- If one cryptocurrency is deemed a security, it could impact all cryptocurrencies
- Consequences of Supreme Court ruling on Matic being a security are uncertain
- 'Major questions doctrine' argument is seen as strong for Coinbase, Binance, and Ripple on appeal
Crypto Regulation and Industry Impact
15:16 - 22:46
- The major questions doctrine could be a strong argument for Coinbase, Binance, and Ripple in their legal cases.
- The SEC is reportedly concerned about the major questions doctrine.
- The legislative process for crypto regulation may not advance in the short term due to political dynamics.
- The Senate banking committee is unlikely to pass any crypto bill without Liz Warren's approval.
- There is uncertainty regarding the future of crypto regulation and its impact on the industry.
- The political shift towards stricter crypto regulations may have been influenced by FTX's involvement with Biden's campaign.
- The XRP case decision could potentially pave the way for a Bitcoin ETF approval, but it's not guaranteed.
- BlackRock's support for a Bitcoin ETF increases the likelihood of its approval before the end of the year.
- There will likely be a fight over regulatory changes affecting decentralized exchanges in Texas.
- Privacy concerns remain important in the crypto industry.
Collaboration and Privacy in the Crypto Community
22:18 - 25:56
- Solidarity with my Defe guys
- Amp and Zcash have a good partnership
- There will be a fight with the reg. H. S. Changes to define Texas as exchanges
- Paying attention to privacy and being collaborative with the crypto community
- Concerns about a bill pushed by Chainalysis that could lead to outlawing privacy technology or targeting privacy coins
- Questioning support for Bitcoin if it aligns with sections that may come after Whirlpool, a legitimate mixer
- Expressing dislike for Loma skill a brand part two and concerns about its impact on Bitcoin privacy
- Discussion about Arkham situation and personal stance on social media companies collecting personal information