Will Coinbase relist XRP?
The current legal battle between Ripple (XRP) and United States Securities and Exchange (SEC), has sparked lots of debates and interests for the past two years with no sign of closure.
As observers have expected the fight will enter its endgame by the first half of 2023, Coinbase comes out in support of the payment company.
Allies of Necessity
Coinbase’s chief legal officer Paul Grewal said on Tuesday that the exchange has filed for an amicus brief to support Ripple in the ongoing battle against SEC.
The U.S. District Judge Analisa Torres will be in charge of reviewing Coinbase’s submission and decide whether or not to grant permission to the exchange.
Amicus brief, or amicus curiae, is a legal document submitted to the court by an individual or organization who is not a party to a particular case.
The term is also known as “friend of the court.” Coinbase’s amicus curiae brief is, “ is a textbook case of just how critical fair notice is any reasonable notice of due process under law,” Grewal tweeted.
As outlined by the CTO, the agency failed to prove that XRP’s conduct was illegal before coming up with enforcement action.
He argued that, “By suing sellers of XRP tokens after making public statements signaling that those transactions were lawful, the SEC has lost sight of this bedrock principle.”
In December 2020, the SEC sued Ripple Labs with CEO Brad Garlinghouse and Chris Larsen, alleging that the company raised more than $1.3 billion by selling XRP as an unregistered security.
Up to now, Gary Gensler has only recognized that Bitcoin is not a security. The chairman previously said that most cryptocurrencies are securities, even including Ethereum.
The move probably sees Coinbase joining forces with other entities such as the cryptocurrency advocacy group the Blockchain Association, crypto payments wallet SpendTheBits, the non-profit organization Investor Choice Advocates Network, and the venture capital firm Valhil Capital, in endeavor to defend Ripple against the SEC.
In the wake of the surprising turn, the community has questioned whether Coinbase would relist XRP.
The probability that the exchange will reinstate XRP trading on its platform is higher following the move. Rumors previously circulated that the listing was unlikely to happen until SEC’s settlement in favor of XRP.
Coinbase has been actively involved in the legal field to protect the interests of the crypto industry in the US, most clearly by sponsoring a lawsuit against the US Treasury Department’s Tornado Cash ruling.
Will SEC Compromise?
The SEC’s approach to cryptocurrency regulation is widely criticized. Industry participants believe that the regulator is imposing improper and overdone regulatory actions. Putting on the fair side, it’s quite difficult for the securities watchdog to keep up with the fast-paced cryptocurrency space.
In an interview with Decrypt, SEC Commissioner Hester Peirce stated that the SEC’s attitude to crypto is contrary to how it normally operates. It mainly comes from regulators’ initial assumption that the industry would be short-lived, according to the commissioner.
This belief isolated the agency from pursuing appropriate sector-regulation measures. Peirce proposed a combined collaboration between the SEC and the entire sector to reestablish a healthy way of interacting with crypto firms.
SEC Chairman Gary Gensler noted large enforcement actions against crypto firms as part of the “economic realities” of securities regulation in his “Remarks Before the Practising Law Institute’s 54th Annual Institute on Securities Regulation.”
When it comes to enforcement against crypto firms, the SEC will not compromise, but it is open to negotiations. Firms with misbehavior, according to Gensler, might come in and talk to the SEC about remediation.
Neither the SEC nor XRP have declared victory. The legal dispute between the two companies is evocative of the Blockone case.
At the time, the SEC and Blockone were negotiating. Blockone paid a fee, and the SEC did not declare EOS to be a security, but it did not deny that it is not.