David Schwartz believes the U.S. legal system is looking more skeptically at SEC cases against various cryptocurrency industry participants.
A court ruling that cleared Ripple's XRP token of being considered a security offering might signal a turn in the tide against regulatory scrutiny of the cryptocurrency ecosystem in the United States and current lawsuits involving the likes of Coinbase and Binance.US and pending ETF applications.
Speaking exclusively to Cointelegraph during the company’s annual Apex developer conference being hosted in Amsterdam, Netherlands, Ripple CTO David Schwartz weighed in on the potential precedent set by a federal judge ruling that XRP was not a security when sold programmatically on cryptocurrency exchanges.
Ripple has been entwined in a protracted legal battle with the U.S. Securities and Exchange Commission since 2020, but its recent part victory may have positive implications for a number of crypto-related lawsuits instituted by the SEC.
Schwartz admitted that the SEC case had cost Ripple business deals that had been on the table, but stressed that the bigger loss was felt in the community as ecosystem support felt stifled by the delisting of XRP across a number of prominent exchanges. This has since changed with the latest ruling in favour of XRP:
“The ruling that we've had so far was sufficient to allow exchanges to relist XRP, and it was big, I think, for the entire ecosystem.”
Schwartz said that the tide was perhaps turning in the United States, where crypto ecosystem participants began considering relocating to different jurisdictions in order to continue operating away from a cloud of regulatory uncertainty:
“I feel bad that I have to tell people that the United States is probably not where they want to be, but the tide is turning. You know, the ruling in our suit that basically said that XRP is not inherently a security, that’s huge.”
Schwartz said that the wider industry was now feeling the scrutiny that Ripple had first endured from the SEC in 2020, with the likes of major cryptocurrency blockchains like Solana, Cardano and Polygon seeing their respective tokens labeled alongside others as unregistered securities in the SEC’s lawsuits against Coinbase earlier in 2023.
“They (SEC) can apply these very same arguments to whatever cryptocurrency you like or whatever business you like. Fortunately, people understand that argument a lot better now that they've seen the SEC go after Coinbase and others and some of the things they've done.”
The Ripple CTO also believes that U.S. judges are looking more skeptically at cases brought forward by the SEC and that companies with the resources are taking a stand that will benefit the wider industry.
“They're starting to get huge pushback from Coinbase and pushback on the ETFs. Hopefully that will prompt some changes at the legislature level, hopefully positive ones.”
Ripple's Apex conference brings together developers building within the XRP Ledger blockchain ecosystem. The blockchain forms the backbone of RippleNet, the platform that manages Ripple's XRP payments system.
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