The perpetual feud between San Francisco-based fintech firm Ripple Labs and the SEC may be coming to an end soon. Well, in this context, the former SEC commissioner had many interesting observations.
The SEC vs. Ripple’s case was a mistake, according to former SEC commissioner Joseph Grundfest, who said in an interview that “no matter how it turns out, we’re going to be losers.”
According to his statements, it seems that even if the SEC wins the battle, they would ultimately lose the war.
A lose-lose situation
My interview with former SEC Commissioner Joseph Grundfest is live!
WATCH ️ https://t.co/aAFCmpq9Po
Subjects:
– Joe’s background
† #SECGary Gensler, & #crypto Regulations
† #Ripple #XRP Lawsuit
– Jay Clayton & Bill Hinman
† #Bitcoin Spot ETF
† #CBDCs pic.twitter.com/q7bDODqSiF— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) March 9, 2022
The former SEC commissioner was among the first to criticize the decision to pursue the XRP lawsuit. In fact, Grundfest had sent a letter to related commissioners before the complaint was finally filed. Nevertheless, this move (to sue Ripple Labs) was quite unpopular, even among SEC officials. In this regard, Grundfest claimed,
“It’s no secret that I had questions about the verdict involved in the filing of the lawsuit against XRP. I had questions about timing, implications, policy. Is this an issue that is socially best addressed by filing a lawsuit? Or say “let’s look at our regulations”?”
Regardless of the winner, the lawsuit has a high probability that “whoever wins will take us further from a good solution,” he added. In fact, he criticized the XRP lawsuit, not on impropriety but on judgment.
He added that if the SEC wins, “we’re going to have an insane regime where we try to fit square pins to round holes”. “If XRP wins, probably one of the few agents we have will be weakened to the beat…”
Either way, “we’re going to be losers,” he concluded. Surprisingly, he even asked, “Is this lawsuit really helping us achieve any of these results?”
Heavy load
The aforementioned lawsuit could end by August 26, 2022, according to attorney Jeremy Hogan’s tweets on March 6. Be it a settlement or a court decision. When asked about the outcome, Grundfest explained why it will be a complicated matter anyway.
“A lot of public discussions are about whether XRP is a security or not, but there are other issues here that I think are even more intellectually intriguing and perhaps even more determinant of the outcome.”
According to him, this is the tricky part: “If you’re transacting XRP on a foreign currency, that’s not in the United States, the SEC can’t reach it.” This was in line with the opinion of the US Supreme Court.
It is important to note that federal securities laws only apply to transactions that take place in the United States, with the rule of thumb being the transaction that is entered into in the jurisdiction.
Nevertheless, this would speed up the complexity of the XRP structure, the consensus mechanism. Ergo, an XRP trade is considered closed out of jurisdiction, either in part or in full.
“The burden of proof lies with the plaintiff,” he said thought†
At least Grundfest claimed that the SEC can win the battle, but lose the war. However, XRP holders suffered heavily during this period.
This post Why the SEC vs. Ripple lawsuit is a ‘LOSS-LOSS’ situation despite one clear winner
was published first on https://ambcrypto.com/heres-why-the-sec-vs-ripple-lawsuit-is-a-lose-lose-situation-despite-one-clear-winner/
