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Here’s What Happened in January – Crypto News

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1 year ago

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TL;DR

  • The SEC doubled down on its appeal against the 2023 ruling favoring Ripple, while the non-profit organization Better Markets sided with the regulator, arguing that XRP is a security.
  • With pro-crypto Mark Uyeda replacing Gary Gensler at the SEC, analysts speculate on potential outcomes that could favor Ripple.

The Tussle Goes on

While the lawsuit between Ripple and the US Securities and Exchange Commission (SEC) started in 2020, its final resolution remains to be seen. The past few years were quite eventful, with numerous developments and partial court wins that seemingly tipped the scales in favor of the company.

The first month of the new year also offered some key updates. In mid-January, the securities regulator officially filed its first opening brief as part of its appeal against a court decision concerning the XRP sold on exchanges years ago. It also insisted (once again) that Ripple’s native token should be classified as a security. A week later, Ripple requested a due date of April 16, 2025, for its brief. 

The SEC’s appeal concerns Judge Torres’ ruling from August 2023 when she found that the firm’s programmatic sales of XRP to retail clients through centralized exchanges did not breach the rules. 

And while the crypto industry has largely sided with Ripple in the lawsuit, some financial entities have voiced support for the Commission. On January 22, the non-profit organization Better Markets categorized XRP as a security.

“The XRP tokens sold by Ripple Labs, Inc. (“Ripple”) are investment contract securities regardless of whether investors acquired them directly from Ripple or indirectly on secondary trading platforms.

And they are investment contracts regardless of the purchasers’ level of sophistication. In all cases, investors were led to expect profits from the efforts of others, thus satisfying the third prong of the Howey test for investment contracts,” the brief reads. 

Gensler’s Departure

An important event that may impact the Ripple v. SEC case is Gary Gensler’s resignation as a Chairman of the watchdog. He stepped down on January 20 (the day of Donald Trump’s inauguration) and was replaced by the pro-crypto Mark Uyeda. 

Gensler was considered a huge enemy of the crypto sector, and the XRP army interpreted the shifts in the SEC’s leadership as something that could lead to a potentially favorable resolution for Ripple. 

One person who presented three possible outcome scenarios following the changes is the American attorney John Deaton. First, he assumed that the SEC might stand by its appeal, thus prolonging the battle indefinitely.

Second, he suggested that the regulator could dismiss the plea and insist that Ripple pay the previously ruled penalty of $125 million. Last summer, Judge Torres ordered the company to settle the amount due to violating certain rules. Some of the company’s execs were more than happy to abide by the rules, considering that the fine represented just a fraction of the $2 billion the SEC initially asked for. 

Deaton concluded that the third (most unlikely) scenario includes dismissing the appeal and scrapping the multi-million penalty. 

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