Top Ripple Lawyer Commends Coinbase’s Legal Battle Against “Broken Regulator”
In a recent development in the cryptocurrency industry, Stuart Alderoty, a top lawyer at Ripple, has praised the legal team of Coinbase for their ongoing battle against the U.S. Securities and Exchange Commission (SEC). This endorsement comes amid Coinbase’s effort to dismiss a lawsuit filed by the SEC, which accuses the company of facilitating trading of unregistered securities.
Coinbase’s Stance Against SEC
Paul Grewal, representing Coinbase, has recently articulated the company’s position regarding the SEC’s lawsuit. Grewal asserts that the SEC is overreaching its authority by claiming broad jurisdiction over all investment types without a clear limiting principle. He emphasized that Coinbase does not offer securities and expressed confidence in the company’s legal arguments.
Grewal also highlighted the importance of Congress, rather than the SEC, in defining regulatory boundaries. This statement echoes an industry-wide call for more precise legislative guidance in the realm of cryptocurrency.
Ripple Case and Its Implications for Coinbase
The SEC’s lawsuit against Coinbase hinges on whether transactions in about a dozen cryptocurrency tokens constitute unregistered securities. The recent Coinbase hearing saw the SEC’s legal team referencing Judge Torres’s ruling in the Ripple case. The SEC lawyer disagreed with Judge Torres’s decision, which differentiated between sales of the XRP token to retail investors on the secondary market and to institutions or ‘sophisticated’ investors.
Judge Katherine Polk Failla has not yet made a final ruling on whether the lawsuit should be dismissed, with a decision expected in the coming weeks. This case is closely watched as it may set a significant precedent for the cryptocurrency industry.
Coinbase’s Argument: Crypto vs. Beanie Babies
In a surprising comparison, Coinbase argued that buying cryptocurrency on an exchange was more like collecting Beanie Babies than investing in a stock or bond. This argument was made during a New York federal court hearing, where Coinbase sought to dismiss the SEC’s lawsuit.
Ripple Lawyer’s Endorsement
Stuart Alderoty, Ripple’s top lawyer, commended Coinbase’s legal team for challenging the SEC’s regulatory overreach. Alderoty’s endorsement is significant given Ripple’s own legal battle with the SEC, which resulted in a partial victory for Ripple when a judge ruled that some of Ripple’s sales of XRP did not violate securities laws.
The Future of Cryptocurrency Regulation
The legal status of cryptocurrencies varies substantially from one jurisdiction to another, and is still undefined or changing in many of them. The outcome of the SEC lawsuit against Coinbase could potentially influence future regulatory decisions and provide clearer guidelines for the cryptocurrency industry.
The ongoing legal battle between Coinbase and the SEC underscores the need for a more defined regulatory framework for cryptocurrencies. As the industry continues to grow and evolve, the resolution of this case could set a significant precedent for future cryptocurrency regulation.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information