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In the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), a new phase has begun with Ripple’s recent submission of a Supplemental Authority Notice. Ripple submitted this notice to Judge Analisa Torres on July 2, 2024, to support its opposition to the SEC’s request for a resolution and final judgment. Ripple cites Binance’s recent legal victory to argue that the SEC’s regulatory approach is inadequate and that relying on court cases to regulate the cryptocurrency space leads to inconsistent outcomes.
What Are Ripple’s Claims?
Ripple pointed out in its filing that cryptocurrencies do not easily fit into the traditional securities framework known as the Howey Test. The seven-page opinion emphasized that the SEC’s strategy of using enforcement actions instead of clear regulatory guidelines creates uncertainty for market participants and leads to unpredictable legal interpretations.
Ripple’s main strategy is to force the SEC to reconsider its regulatory approach to the cryptocurrency space.
SEC’s Counterarguments and the Future of the Legal Process
The SEC is expected to counter Ripple’s notice by referencing its success in the Terraform Labs case. In this case, Judge Rakoff ruled that Terraform Labs and its founder Do Kwon violated U.S. securities laws by failing to register TerraUSD and Luna as securities.
This ruling could serve as a precedent supporting the SEC’s stance against Ripple. Additionally, Judge Rakoff questioned the Programmatic Sales ruling of XRP, suggesting that Judge Torres might have erred in her decision regarding XRP’s status.
The outcome of this case has significant implications for the price of XRP and the broader cryptocurrency market. A victory for Ripple could trigger a substantial increase in XRP’s price, while a win for the SEC could lead to a decline in XRP’s value.
XRP’s Market Performance
Currently, XRP’s market performance shows a slight increase of 0.5%, bringing its trading price to $0.4792 and its market cap to $26.68 billion. However, this increase is below the recent high of $0.52, influenced by speculation regarding the approval of an Ethereum ETF.
As legal proceedings continue, the final decision will be closely watched by both legal experts and market participants. The resolution of this case could set a significant precedent for how cryptocurrencies will be regulated in the future.
