According to many crypto experts, the United States Securities and Exchange Committee is likely to suffer a tremendous setback in the ongoing Ripple vs SEC lawsuit.
A judgment against the regulator could seriously restrict its ability to oversee crypto asset regulation. This would be a significant victory for the industry and innovative thinking in the United States.
“If that’s how it ends, it’ll have been a self-inflicted disaster from the start,” senior researcher Roslyn Layton told Forbes on October 30.
In December 2020, the SEC acted quickly against Ripple and two senior executives. It accused the company of selling its XRP token in an unregistered securities transaction. Ripple CEO Brad Garlinghouse called the SEC’s refusal to turn over relevant documentation “shameful” earlier in the month.
For nearly two years, Ripple and token owners have been trying to fight back, and their case is becoming stronger. What’s more, over 75,000 XRP shareholders have contributed to the cause by filing amicus briefs in support of Ripple.
“The SEC had no allies, not even its own expert witnesses,” Layton authored.
According to attorney Jeremy Hogan, the SEC can only win if the case’s presiding judge, Judge Torres, “neglects her first year of law school.”
Other prominent legal experts also agree that Ripple is on the path to victory. Curt Levey of the Federalist Society and Professor J.W. Verret of George Mason University’s Scalia School of Law are among them.
According to Verret, the SEC may file an appeal with the Supreme Court, which it is likely to lose. This has the potential to completely overturn or eliminate the use of the Howey Test to classify cryptocurrencies.
This test has been used by SEC Chair Gary Gensler to assert that digital currencies are securities. The Howey Test, established in 1946, defines what constitutes an “investment contract” and thus a security. A contract is defined as “an investment of money in a common enterprise with a realistic chance of financial gain from the efforts of others.”
If the SEC rules that XRP is not a protection, Ripple has already reached a settlement and paid a fine. However, it appears that Gensler and company are committed to fighting even if it is a losing battle.
The Ripple vs SEC case has already gathered too much popularity all over given time. Many believe and see it as a potential lawsuit whose result might end up giving the crypto space a whole new direction and so to the regulatory authorities.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/10/31/legal-experts-believe-the-sec-to-face-massive-defeat-in-lawsuit-against-ripple/