Ripple’s Fight Against SEC Saved 60+ Altcoins From “Security” Label; Here’s How

Attorney Bill Morgan has commented on the recent SEC settlement with Stoner Cats 2 LLC (SC2), saying that it could have major implications for the crypto industry. SC2 settled after being charged $1 million for conducting an unregistered crypto asset securities offering, raising $8.2 million through NFT sales.

Morgan said that the settlement shows that the SEC is taking a more aggressive approach to regulating crypto. He warned that other crypto projects could face similar charges if they are not careful.

Ripple CCO Doubts SEC’s Approach

Stuart Alderoty, the chief legal officer of Ripple Labs, has also expressed doubts about the SEC’s approach to regulating crypto. He said that settlements like the SC2 case are not legally binding and do not set a precedent. He also said that the SEC often loses cases when they are challenged in court.

Ripple’s Victory Could Affect Other Cryptos

Morgan’s statement underscores that Ripple’s partial victory had caused a significant impact on crypto regulations. He noted the fact that without Ripple’s battle against the SEC, most cryptocurrencies (except Bitcoin) might have been seen as securities. This is a noteworthy viewpoint.

Similarly, John Deaton has also argued that Ripple will never settle with the SEC, as their victory would be a win for both the crypto industry and ordinary individuals aspiring to join this innovative field. 

Also Read: XRP Lawsuit News: We’re Prepared for a Full-Blown Fight With the SEC- Says Ripple President

Is the SEC Hurting Crypto?

Former Federal Prosecutor James K. Filan and Bill Morgan, both agreed that SEC’s heavy-handed approach had crushed crypto. They argue that the regulatory body, unfamiliar with the market, is more of a hindrance than a safeguard. They commend Ripple for fighting and securing a ‘not security’ classification for its token, XRP.

Since 2017, the SEC has been exerting pressure on the crypto industry. SEC Chair Gary Gensler’s stance that only Bitcoin falls outside their regulatory scope suggests that all other altcoins could be considered securities. To date, the SEC has categorized more than 60 crypto assets as securities in various lawsuits against crypto companies. 

This Could Be the Turning Point We All Need

However, in the case of Ripple Labs, a federal court ruled that XRP, which stands as the sixth-largest cryptocurrency, does not qualify as a security. While the SEC accepted this classification, they are pursuing an interlocutory appeal related to Ripple’s programmatic sales and other distributions.

Consequently, the recent court ruling regarding XRP dealt a significant blow to the SEC’s attempt to label all altcoins as securities.

Also Read: Ripple’s Party Not Just About XRP Price, But a Celebration of Its Freedom