- The US Securities and Exchange Commission (SEC) is reported to have given up an appeal on the XRP ruling after admitting that some listed cryptos in the Binance lawsuit are not securities.
- SEC modifies its original complaint against Binance, claims its use of the term “crypto asset securities” does not refer to the crypto itself but to a set of contracts, expectations, and understandings.
The US Securities and Exchange Commission (SEC) has finally thrown in the towel as it decided not to appeal the XRP ruling, marking the end of the almost four-year-long legal battle. According to the information disclosed by WallStreetBulls, the SEC’s decision is bordered around its position in the ongoing Binance case after acknowledging that crypto, by itself, does not qualify to be classified as securities.
The Ripple case is over, and the SEC won’t appeal. Why? Because in the Binance case, the SEC has now acknowledged that crypto, by itself, is not a security. With this stance, they have no grounds to appeal the XRP ruling. It’s officially done and dusted!
What Happened in the SEC vs Binance Case
It can be recalled that the SEC filed a lawsuit against Binance and former CEO Changpeng Zhao, as well as BAM Trading and BAM Management.
According to the details, the trading platform allegedly violated federal securities laws by conducting unregistered offers and sales of securities to US investors. Fascinatingly, the filing allocated 53 pages worth of context to comprehensively describe 12 cryptos listed by the Commission to have been sold as securities. The assets were: Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS) and Coti (COTI).
After a year of “legal back and forth,” the SEC has modified its original complaint to admit that 10 crypto assets, including SOL and ADA, are not considered securities. According to them, its use of the term “crypto asset securities” in the complaint refers to the full set of contracts, expectations, and understandings centered on the sales and distribution of the crypto asset. In addition to this, the SEC stated that it regrets any confusion its earlier terminologies may have caused.
To experts, this modification and admission may have influenced the SEC’s decision not to appeal the XRP ruling.
Following this report, Ripple’s Chief Legal Officer, Stuart Alderoty, informed the entire industry that its “fair notice” defense is available for use and could be vital for other crypto entities. On top of that, he pointed out that authorities need to address the regulatory ambiguity within the industry, citing the recent apology by the SEC for lack of clarity after relying on the 2017 DAO report.
Industry Figures Criticizes SEC
Several key figures in the crypto industry have reacted to the SEC’s admission regarding the classification of tokens as securities. One of them is Coinbase’s Chief Legal Officer Paul Grewal who repeated SEC’s statement and humorously guessed how surprised Alderoty would be when he woke up to this interesting modification.
“The SEC regrets any confusion it may have invited” by falsely and repeatedly stating that tokens themselves are securities. This is the remarkable representation in Footnote 6 of @SECGov‘s Amended Complaint against Binance. I hope @s_alderoty is getting some good sleep tonight.… pic.twitter.com/PpbprvkGxh— paulgrewal.eth (@iampaulgrewal) September 13, 2024
Later, Alderoty wrote that:
So the SEC finally admits that 1/ ‘crypto asset security’ is a made-up term and 2/ to prove a ‘crypto asset security’ is an investment contract, the SEC needs evidence of a bundle of ‘contracts, expectations, and understandings’?
Following the conclusion of the case, Robinhood has made a significant move to relist XRP on its trading platform as we earlier reported.
Regardless of this massive development, the price of XRP has failed to rise as it remains 2.9% down in the last 24 hours and is trading at $0.57.
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