A legal showdown between the Securities and Exchange Commission and a San Francisco company is now a nerve-wracking waiting game for much of the crypto industry.
A ruling in the battle between the SEC and Ripple, the San Francisco blockchain payments system, is imminent. The decision is expected to have serious consequences for the controversial industry.
In December 2020, the SEC sued Ripple, accusing it of failing to register roughly $1.4 billion worth of its XRP cryptocurrency as securities. Ripple uses XRP to run its money transfer network. The case is now in the hands of a U.S. magistrate in New York.
Crypto leaders criticized the SEC action, accusing the agency of "regulation by enforcement"
If the SEC wins, it could disrupt the way U.S. crypto companies operate based on the federal agency’s argument that most of the products they are selling should be subject to strict reporting and registration rules that apply to securities.
If Ripple wins, it would be a major victory for crypto — and a big blow to the SEC under Chair Gary Gensler.
“The Ripple outcome will set the direction and tone for how the U.S. regulates crypto moving forward,” analyst Rebecca Wettemann, a principal at Valoir, told The Examiner.
The case focuses squarely on a critical disagreement between the crypto industry and the SEC.
Crypto companies argue that they are building a transparent, decentralized financial ecosystem using blockchain technology that uses cryptocurrencies to store and transfer value.
The SEC says most cryptocurrencies should be regulated as securities, arguing that these are essentially investment contracts that promise a financial return to customers.
Source : [Why SEC-Ripple ruling will be a game-changer for crypto | San ...](news.google.com/rss/articles/CBMiiQFodHRwczovL3d3dy5zZmV4YW1pbmVyLmNvbS9uZXdzL3doeS1zZWMtcmlwcGxlLXJ1bGluZy13aWxsLWJlLWEtZ2FtZS1jaGFuZ2VyLWZvci1jcnlwdG8vYXJ0aWNsZV8xOGE1ZTQ4ZS1hZDVhLTExZWQtYmEzZi1kYjNjYWE0NDk5N2MuaHRtbNIBAA?oc=5) undefined - San Francisco Examiner / February 16, 2023