SEC APPEALS RIPPLE COURT DECISION
Was the Securities and Exchange Commision unfairly targeting XRP with its lawsuit, while giving other cryptos like Ethereum a pass?
Uncovered emails appear to point to that possibility. But that hasn’t stopped the SEC from formally appealing a recent court decision that gave a partial victory to Ripple Networks in the securities case.
The SEC asked NY Southern District Federal Judge Analisa Torres, who ruled on the case, to stay her orders, and allow an “Interlocutory Appeal to the Second Circuit Court of Appeals on Two Adverse Determinations.”
That essentially would bump the appeal straight to the Court of Appeals, while other aspects of the case are still being litigated.
According to CryptoLaw, breaking down the SEC move on Twitter:
“Judge Torres and the Second Circuit will both have to agree with the SEC’s arguments for why an interlocutory appeal should be allowed before the trial on “aiding & abetting” by
and the remedies phase of the ruling on Institutional Sales.
If the interlocutory appeal request from the SEC is ultimately not granted, then the SEC will have to wait until after the trial and remedies phases to attempt its appeal.
In July, Judge Torres struck a blow to the SEC’s years-long lawsuit against Ripple, by declaring that XRP tokens sold on secondary retail exchanges did not meet the definition of “securities” and thus were not subject to SEC authority.
It was hailed as a substantial victory for Ripple, and more widely seen as beneficial for the crypto sector.
Regarding the SEC’s new appeal, some legal experts say the agency has weak prospects for overturning key aspects of the ruling by Torres.
Crypto savvy attorney Jeremy Hogan commented concerning the appeal:
“And a friendly reminder from the Judge: ‘XRP, as a digital token, is not in and of itself a ‘contract, transaction[,] or scheme’ that embodies the Howey requirements of an investment contract.”
As reported by Cointelegraph, Hogan believes that even if the SEC won the court appeal on sales, preventing Ripple from facilitating sales of the XRP token on crypto exchanges, exchanges would still be able to list XRP, as long as those sales aren’t made by Ripple. (“‘XRP is not a security. Period’ — Crypto lawyers on Ripple’s case amid SEC appeal,” 11 Aug 2023.)
Damaging Info Concerning SEC connected Crypto Manipulation and Favoritism
It’s hardly news that many XRP holders believe that Ripple was targeted unfairly by the SEC while other cryptos like Ethereum managed to avoid lawsuits.
CryptoLaw, an account and crypto news outlet run by pro-XRP lawyer John Deaton, has drawn the ties showing how William Hinman, the former director of the SEC’s Division of Corporation Finance from 2017 to 2020, had a conflict of interest in his Ethereum comments from that time period.
As noted by Coindesk, emails revealed in June as part of the SEC Ripple lawsuit showed Hineman saying in 2018 that he saw no “need to regulate ETH as a security.”
There is also a video from 2017 showing Hineman testifying concerning Ethereum, and offering a similar assessment.
But Hineman was also being paid millions (according to CryptoLaw) at around that time by Simpson Thatcher, which was part of a group promoting use of Ethereum.
CryptoLaw has been advocating since 2022 that Congress needs to closely examine Hineman’s actions and appearances of conflict of interest, in regard to Ethereum promotion, and actions against Ripple.
KEEP YOUR COIN ACT PASSES HOUSE COMMITTEE
Along with other recently passed Committee bills, the U.S. House in late July passed a “Keep Your Coins Act of 2023.”
The bill will now be considered by the full House. It safeguards the ability of crypto investors to hold their crypto in digital wallets they control.
Being able to transfer crypto like Bitcoin, Ethereum, Solana and others off of centralized exchanges and into hardware or software “self-custody wallets”—where the user can maintain control over the “private encryption keys”—is one of the most crucial and empowering components of crypto.
The bill which passed the same week as two other major crypto related bills, the Financial Innovation and Technology (FIT) for the 21st Century Act, and the Blockchain Regulatory Certainty Act, and the Clarity for Payment Stablecoins Act, made it out of committee. (See “HOUSE COMMITTEE PASSES TWO SIGNIFICANT CRYPTO BILLS,” 1 Aug 2023.)
The Crypto Self-Custody Act addresses one of the most basic functionalities of crypto technology, and something crypto users have been doing since the dawn of crypto.
After the bill passed, Davidson tweeted, as reported by Bitcoin.com and others:
“Last night, U.S. House Committee on Financial Services passed my bill to protect self-custody. Those attacking self-custody oppose individual freedom. They want someone they control to control your assets. Defend Freedom.”
(“US House Committee Passes ‘Keep Your Coins Act’ to Protect Right to Self-Custody Crypto,” 29 Jul 2023.)
Under the Act, federal organizations are barred “from restricting the use of convertible virtual currency by a person to purchase goods or services for the person’s own use, and for other purposes.”
It also stipulates feds may not restrict people from “self-custody digital assets using a self-hosted wallet or other means to conduct transactions for any lawful purpose.”