There have been several controversial cases before, but the world is currently watching the XRP vs. SEC case in the United States. Mount Equity Group Review believes that the lawsuit’s possible long-term impact on the entire Financial Technology sector justifies its international interest. The results of this particular case could make or break the Fintech industry as a whole.
XRP vs. SEC Overview
According to lawyer John Deaton, this particular case is unique because it’s causing an issue with an existing asset years after its release. In 2019, Coinbase Global, Inc. (Coinbase) checked in with the Securities and Exchange Commission (SEC) regarding XRP because they didn’t think it was a security asset.
Back then, the SEC didn’t say anything to persuade Coinbase otherwise. 18 months after listing XRP, the SEC decided that Ripple should have registered XRP even if it had already been in the ecosystem for a while at that point. This post-release correction added to its controversial nature since the SEC usually made this distinction before release.
Mount Equity Group Review finds that Ripple marketed, packaged, and advertised XRP differently from a security asset. If the SEC had sued Ripple for offering and selling unregistered security assets between 2013 to 2017, those transactions would have constituted unregistered securities. That decision would not have been controversial, but instead, after years of being in public exchanges and platforms, the SEC suddenly declared that XRP is a security asset and sued the company for failure to register, among other things.
Usually, the SEC sues individual executives alleging fraud or deceit, misrepresentation, market manipulation, and fact omissions. However, in this case, they acted too late, prompting reactions from professionals all over the Fintech sector.
The Curious Case of the SEC and Association with XRP Rivals
According to the Mount Equity Group Review, while at the SEC, Bill Hinman collected 15 million dollars from his law firm Simpson Thacher & Bartlett, LLP, a member of the Enterprise Ethereum Alliance. Allegedly, Ethereum investors helped Hinman’s speech.
Incidentally, One River makes a one billion dollar bet on Ethereum and Bitcoin; Jay Clayton brings a case against XRP just as he’s resigning, and he works for One River less than ten weeks after. The plot thickens when you learn that Clayton’s law firm, Sullivan and Cromwell, represents ConsenSys and Joe Lubin, Ethereum co-founder. The firm brokered a deal between ConsenSys and JP Morgan for Quorum, JP Morgan’s coin, which is a direct XRP competitor.
According to John Deaton, this case harmed thousands of XRP holders, so he’s confident that there will be an investigation to look into these things at some point. Someone can officially decide whether or not there was criminality involved.
Can You Sue the SEC?
It’s tough because anybody planning to sue the SEC has to provide a heads up, giving them six months from the notice to the actual lawsuit. However, the SEC has qualified immunity, meaning that if an official makes a mistake while he’s acting in the ordinary course of his job, you can’t sue him. Therefore, people filing a lawsuit against an SEC official should provide irrefutable proof that the circumstances are beyond the standard approach of the job.
The XRP vs. SEC case has certainly evoked several reactions from the Fintech industry. According to sources, some people can’t convert their XRP to Bitcoin, Ether, or US dollars, and frozen until the outcome of this case. Some people believe the SEC operates on conflict of interest, while others think countries should regulate cryptocurrencies like XRP. Whichever side of the fence you’re on, you can learn many things from this case.