- Industry experts are very critical of the SEC’s sustained enforcement action.
- Ripple’s CLO is particularly critical of the Stoner Cats lawsuit settlement.
The United States Securities and Exchange Commission (SEC) scrutiny has further intensified with Stoner Cats 2 LLC being the new victim.
According to the regulator’s filing, Stoner Cats LLC was indicted for conducting an unregistered offering of crypto asset securities in the form of Non-Fungible Tokens (NFTs). With this offering, the firm raised up to $8 million from investors to finance an animated web series known as Stoner Cats.
In response to this new enforcement action, Ripple’s Chief Legal Officer Stuart Alderoty mentioned that a settlement to avoid a crushing SEC process without ‘admitting or denying’ anything is binding on no one. In his opinion, a cynic would call it a PR stunt. As far as Alderoty is concerned, what matters most is that the regulator loses out on every crypto-related case that it takes to court.
Ripple has had an almost three-year-long lawsuit with the regulator over the classification of its associated XRP token. While the SEC has been arguing that XRP is security, on July 13th, Judge Analisa Torres ruled against the SEC’s stance, stating that XRP is in itself not a security.
The entire crypto industry had expected that the ruling that favored Ripple Labs could erase the ambiguity regarding cryptocurrencies in relation to the SEC. Its recent crackdown on Stoner Cats LLC confirms that this is not the case as obviously, the U.S. SEC has refused to rethink its approach toward the digital asset industry.
Ripple Labs’ Victory to Impact Crypto Regulations
In the meantime, the broad crypto market awaits the judge’s final verdict on the SEC’s motion for interlocutory appeal in the ongoing Ripple Lawsuit. The crypto community is positive that disapproval from Judge Torres may cause the regulator to reflect on the trend of its enforcement actions.
There is also the ongoing Coinbase case which the markets await a court ruling on the Motion to Dismiss (MTD) filed by the trading platform.
The American cryptocurrency exchange Coinbase was sued by the SEC for operating as an unregistered broker. The case has been looming and its outcome might also determine the trajectory of the regulatory environment.
District Judge Hon. Katherine Polk Failla’s verdict on the MTD will play a crucial part. If she grants the request, pro-XRP lawyer John E. Deaton expects that Capitol Hill will force the SEC to settle the Ripple case.
The lawsuit is still impacting the performance of XRP which in recent times has not shown promising signals. The coin has stayed below the 50-day and 200-day EMAs for a while, a trend that underscores a bear movement. It is believed that a positive ruling on the Ripple and Coinbase case with the regulator might act as a catalyst for a price breakout. Currently, XRP is trading at $0.494 after gaining 1.37% in the past 24 hours.
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