Coinbase and Ripple Labs are stepping up their legal battles with the U.S. Securities and Exchange Commission (SEC) in light of Binance’s recent court victory. Both firms are urging regulators to provide clearer guidance and create a standard framework for classifying the asset class.
The current discussion arose from a recent legal decision concerning Binance, which saw the dismissal of some of its claims against the SEC. Both Ripple and Coinbase have leveraged this decision to call on the SEC to provide clear guidelines within the cryptocurrency space.
In their recent filing, Ripple quoted a judge implying that cryptocurrencies are not easily categorized under the existing securities laws and pointed out that even the Howey Test formulated in 1946 was not very appropriate in the current context. The purpose of this test is to determine if a transaction falls under the securities law’s rules governing investment contracts.
Like Ripple, Coinbase has also expressed its disappointment in how the SEC has gone overboard in applying securities laws to cryptocurrencies. Coinbase is strongly advocating for a clear and definite process to set industry rules, providing much-needed legal certainty. Coinbase intends to emphasize the critical significance of change and the inadequacies and inefficiencies of current methods by citing the recent Binance decision in their appeal to the courts and regulators.
The SEC has actively engaged with various crypto trading platforms, classifying some of their activities as securities not properly offered for registration. The SEC launched a case against Ripple in December 2020, alleging that Ripple had sold over $1.3 billion worth of XRP in an unregistered manner. But things have shifted as Judge Analisa Torres dismissed certain aspects of the case by saying that certain sales of XRP were not considered securities sales, and this is what Ripple is now using to dismiss all the claims made against them by the SEC.
The SEC is currently investigating Coinbase for allegedly operating as an unregistered securities exchange. However, Coinbase has refuted these allegations and is calling for a clear set of rules for regulators that would outline such limitations. Due to recent legal actions that are extremely similar to the Binance case, both Coinbase and Ripple are seizing the chance to demand clearer rules and guidelines from the SEC. They assert that the current regulatory environment is inefficient and unclear, hindering the industry’s growth and stability.
The recent ruling in the Binance court case, while allowing most of the accusations leveled by the SEC to proceed, dismissed charges regarding the sales of BNB as securities. This has been considered a significant case, and both Coinbase and Ripple have pointed to its significance in their respective cases.
The cryptocurrency industry is keenly waiting for new developments, especially with the SEC’s upcoming conference regarding their case against Binance on July 9. At the center of this, both Coinbase and Ripple are seeking more sustainable rules, saying that they are necessary for the further development of the crypto market.