After the Court of Appeals for the Third Circuit’s ruling partially in favor of Coinbase in its rulemaking petition lawsuit with the US Securities and Exchange Commission (SEC), lawyers tracking Ripple vs SEC lawsuit debate over precedent and clear crypto regulations.
The buzz is around another loss for SEC Chair Gary Gensler as another court states the US SEC’s actions in crypto-related lawsuits as “arbitrary and capricious.”
Pro-XRP Lawyers’ View on Implications for Ripple vs SEC Lawsuit
The United States Court of Appeals for the Third Circuit ruled that the SEC was unjustified in its denial of Coinbase’s rulemaking petition. Appellate court judges asked the regulator to provide a clear explanation of rules and guidelines that indicate digital assets are securities and with reasons.
Lawyer James Murphy, aka MetaLawMan, asserts the US SEC should hold off on any crypto rulemaking until the US Congress passes a market structure bill, clearing out the legal distinction between digital asset commodities and securities.
Lawyer Fred Rispoli reacted to Coinbase CLO Paul Grewal’s post “We just won our petition for a writ of mandamus at the Third Circuit.” Rispoli said Coinbase has lost almost every argument and the company’s only win was the court asked the SEC to provide sufficient reason for denying the petition.
However, he added that phenomenal concurrence by Judge Bibas is exactly what has appealed for in the 2nd Circuit Court. The statement focuses on how old rules from a century ago work for crypto. It reads:
“As I explain, its old regulations fit poorly with this new technology, and its enforcement strategy raises constitutional notice concerns.”
Fred Rispoli believes if the 2nd Circuit Court of Appeals decides to adopt this line of reasoning, then “SEC is done for good with crypto.” It means the court may also slam the SEC and may dismiss or extend the appeal as it reveals that the SEC failed to regulate in good faith.
Ex-SEC Lawyer’s Insights in Relation to XRP Case
Former SEC lawyer James Farrell revealed that the court ruled that any of the 3 rationales offered by the US SEC might suffice. These are “no need for rulemaking; want more info before rulemaking; or other resource priorities. But SEC had to pick 1 or more and spell out the why.”
He agreed that Judge Bibas’ concurrence was more supportive of the industry. However, the same judge also said “Some crypto assets are likewise nothing but creative schemes to evade securities regulations.”
Thus, the court hasn’t provided any clarity, which may depend on the SEC’s methodology used to classify some digital assets are securities.
Notably, lawyers agree that the ruling may apply in other courts if the majority panel of judges likes the reasoning in a sister court’s concurrence opinion.
Opening Brief in Ripple Vs SEC Lawsuit
The crypto industry and lawyers now await the U.S. SEC’s principal brief related to its appeals in SEC v Ripple lawsuit. It is scheduled to be filed by January 15. However, lawyers such as Jeremy Hogan and ex-SEC Marc Fagel believe pro-crypto Paul Atkins under the Trump administration may decide not to pursue the appeal further.
CoinGape has glanced at what could be expected from the opening brief by the U.S. SEC, as per Form C and outgoing SEC Chair Gary Gensler’s stance on crypto.
Varinder Singh
Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space.
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