Litigation Update: Ripple's request to seal key documents could be a cause for concern, former SEC chairman suggests new cryptocurrency regulations are imminent.
Ripple is currently still embroiled in a lawsuit, with Ripple's request to seal some key documents raising suspicions, as lawyers from the U.S. Securities and Exchange Commission (SEC) have criticized Ripple for attempting to conceal facts. Additionally, the former SEC chairman, who quickly resigned after suing Ripple, recently revealed his views on the latest regulatory trends in an interview.
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Ripple Lawsuit Update
According to a document submitted to the U.S. court by Jorge Tenreiro, a senior lawyer at the U.S. Securities and Exchange Commission (SEC), he claims that "Ripple's request to seal critical documents" raises significant concerns. He pointed out:
Ripple seeks to conceal key facts related to the lawsuit from its investors, highlighting the disclosure requirements needed to protect investors as stipulated in the Securities Act of 1933.
Rabbi, Ethereum Burial Attempt Fails
Ripple had also written to the court on 3/15, requesting the SEC to list its understanding and definitions of Bitcoin and Ethereum, but was promptly rejected by the SEC as "irrelevant to this case."
This has naturally raised questions from Ripple supporters. John Deaton, a supporter and lawyer, retorted on Twitter, pointing out that Ethereum's founder, Vitalik Buterin, had initially sold 500,000 Ether to the founder of Galaxy Digital, suggesting that the SEC's actions are akin to selective enforcement.
What @VitalikButerin is doing in the below video is much more of an “offering” of a security than any specific sale of #XRP that I’m aware of – (although I’m not aware of all #XRP sales).
The transfer of 500k #ETH sold to @novogratz that Vitalik publicly stated SAVED the https://t.co/xyx1aPHVB0
— John E Deaton (@JohnEDeaton1) March 23, 2021
According to the document, over 6,000 Ripple holders have filed a motion to intervene in the Ripple lawsuit as defendants, with the aforementioned supporter and lawyer, John Deaton, potentially attending.
Former SEC Chairman: Bitcoin is Not a Security
Former SEC Chairman Jay Clayton recently gave an interview to CNBC, where he reiterated his argument that "Bitcoin is not a security." However, he further revealed the future regulatory direction:
Bitcoin was already considered a non-security before my tenure at the SEC, hence the SEC's jurisdiction over Bitcoin is quite indirect. But this does not mean that the U.S. should not regulate it; ultimately, it will be subject to some domestic and international regulations, whether it's about banks, securities, or tax laws, all of which will indirectly or directly enter the digital asset space.
"Where digital assets land at the end of the day–will be driven in part by regulation both domestic and international, and I expect that regulation will come in this area both directly and indirectly," says Former SEC Chairman Jay Clayton on #bitcoin. pic.twitter.com/voWcgCFqOH
— Squawk Box (@SquawkCNBC) April 1, 2021
Ripple Pins Hope on New SEC Chairman
Since Ripple was sued, its CEO has been quite displeased with the former SEC chairman, believing that he could have sued Ripple during his years in office and choosing to do so just before stepping down was intentional targeting. Ripple's CEO, Brad Garlinghouse, is placing hope on the new chairman, Gary Gensler, to change the outcome of the lawsuit.
However, Gensler had stated in 2018 that Bitcoin was born as an incentive for verifying distributed platforms through mining rewards, not as a company, while Ripple appears very much like a company.