The news spread quickly across Crypto Twitter, Slack, Discord, and Telegram that a federal judge of the U.S. District Court for the Southern District of New York had reviewed the U.S. Security and Exchange Commission’s (SEC) years-long case against Ripple Labs and determined that it fell short in many respects. Bill Hughes, director of global regulatory matters at ConsenSys, said that the SEC’s public comment on the historic decision “contained so much spin that the SEC’s public affairs office must remain nauseous even today.”
The SEC elided everything in the decision that is damaging to its current approach to crypto, and the crypto space was surprised by the outcome. This was supposed to be an easy case for the SEC, yet the court determined that Ripple did not run afoul of the Securities Act of 1933 in its dealings, and the XRP token was not proven to be a security.
The Ripple decision boosts the confidence of the crypto community to stick to its guns that the SEC’s legal theory is wrong and its tactics improper. It also boosts the confidence of the community in its public policy work that the SEC and its benefactors on Capitol Hill seem so committed to undermining. This decision is a clarion call for Congress to act and establish a regulatory framework that is on all fours with the technology.
The Ripple decision shows just how hollow the SEC’s assurances are, and every token issuer, exchange, and software developer that it hauls on to the carpet to make a public example of should now have the sand to fight back.