Ripple Vs SEC Fight Saved 60+ Altcoins From Labeling as “Security”, Except Bitcoin

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Attorney Bill Morgan has chimed in on the recent SEC settlement with Stoner Cats 2 LLC (SC2), highlighting the potential ramifications for the crypto industry. SC2 settled after being charged $1M for conducting an unregistered crypto asset securities offering, raising $8.2 million through NFT sales. While settlements like this don’t establish precedent, they signify the SEC’s increasing involvement in the crypto sector. 

Settlements are like feeding the SEC 

Stuart Alderoty, Ripple Labs Inc.’s Chief Legal Officer, voiced doubts about the SEC’s approach in almost all regulatory cases. While not directly addressing the Stoner Cats case, Alderoty mentioned that settlements made to bypass a rigorous SEC process without admitting guilt hold no legal weight. He suggested that when the SEC is challenged in court, it tends to face defeats.

Bill Morgan Gives Ripple’s Example to Show SEC Can be Bowdown 

Morgan’s statement underscores that Ripple’s partial victory had caused a significant impact on crypto regulations. He noted the fact that without Ripple’s battle against the SEC, most cryptocurrencies (except Bitcoin) might have been seen as securities. This is a noteworthy viewpoint. Similarly, John Deaton has also argued that Ripple will never settle with the SEC, as their victory would be a win for both the crypto industry and ordinary individuals aspiring to join this innovative field. 

Former Federal Prosecutor James K. Filan and Bill Morgan, both agreed that SEC’s heavy-handed approach had crushed crypto. They argue that the regulatory body, unfamiliar with the market, is more of a hindrance than a safeguard. They commend Ripple for fighting and securing a ‘not security’ classification for its token, XRP. XRP is currently trading at $0.49, ditching its 30-day mark of $0.50. 

SEC’s Struggle: Labeling 60+ Altcoins as Securities

Since 2017, the SEC has been exerting pressure on the crypto industry. SEC Chair Gary Gensler’s stance that only Bitcoin falls outside their regulatory scope suggests that all other altcoins could be considered securities. To date, the SEC has categorized more than 60 crypto assets as securities in various lawsuits against crypto companies. 

However, in the case of Ripple Labs, a federal court ruled that XRP, the sixth-largest cryptocurrency, isn’t a security. While the SEC accepted this classification, they’re pursuing an interlocutory appeal regarding Ripple’s programmatic sales and other distributions. Hence, the recent court ruling on XRP dealt a blow to the SEC’s attempt to label all altcoins as securities. 

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