Ripple, the developer of XRP, won Last week, a legal battle with the U.S. Securities and Exchange Commission (SEC) sparked a surge of enthusiasm in the cryptocurrency industry. The SEC has filed a lawsuit against Ripple, accusing the payment and technology company of selling securities-like XRP tokens to investors.
Judge Analisa Torres ruled in Ripple’s favor, declaring that XRP is not a security when sold to the public. According to JP Morgan analysts, this recent court ruling also appears to be Coinbase’s victory in a recent lawsuit filed by the SEC.
JPMorgan Sees Ripple Win Positively, But Coinbase Still Faces Challenges
In a JP Morgan research note, equity analysts led by Kenneth Worthington argue that Ripple’s victory over the SEC could be Coinbase’s victory. On June 6, 2023, the SEC filed a lawsuit against Coinbase, alleging that it was “operating as an unregistered stock exchange.”
The SEC claims that the exchange acted as an intermediary for trading 13 crypto assets, including Cardano, Polygon and Solana. Registered as securities. However, the regulator’s stance appears to be destabilizing following the recent XRP ruling.
“If the Ripple case were successful, it would be more difficult for the SEC to prove the 13 pieces of evidence. [tokens] “Because Coinbase is a security and Coinbase is an unregistered stock exchange, it is exempt from certain future licensing and regulatory requirements,” said a JP Morgan analyst.
Analysts do not believe that Ripple’s victory will completely rule out the SEC lawsuit against Coinbase. This is also because the cryptocurrency exchange has been sued for failing to register for the offering and sale of unregistered securities through a “staking-as-a-service” program, they said.
“Furthermore, to further increase the uncertainty of the Ripple ruling’s impact, the SEC may appeal the Ripple ruling,” JPMorgan analysts added.
Ripple CEO: SEC appeal could take years
and Bloomberg interviewRipple CEO Brad Garlinghouse has suggested it may take some time before the SEC can appeal the latest court ruling.
“Legally, XRP is not a security under current law. Until the SEC gets a chance to appeal (which will be years), frankly, we are very optimistic,” said a Ripple executive.
In the interview, Garlinghouse also called financial regulators “bullies” and directly criticized the SEC’s tactics against the crypto industry. He claims the commission is deliberately creating chaos in order to give more power to the cryptocurrency industry.
XRPUSD trading at $0.74833 | Source: XRPUSD chart from TradingView
Featured image from Coinbase, chart from TradingView