Popular pseudonymous crypto analyst “CryptoWendyO“, who is the founder of CryptoWendyO Media, recently dissected the ongoing legal saga between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs. She highlighted the case’s broader implications, not just for Ripple and its native token XRP, but for the entire cryptocurrency market. “Wendy O” (aka “Crypto Wendy”) suggests that the SEC’s current legal strategy could backfire, potentially setting a precedent that benefits the crypto industry at large.
Wendy provided a recap of the July 13th ruling by Hon. Analisa Torres, a district judge at the United States District Court for the Southern District of New York. The court partially granted and partially denied summary judgment motions from both the SEC and Ripple. The ruling favored Ripple on several counts, including programmatic sales and other distributions of XRP, while siding with the SEC on institutional sales.
The SEC has expressed its intent to appeal Judge Torres’s ruling, particularly the part that found programmatic sales of XRP did not violate securities laws. Wendy emphasized that Ripple has countered this move, arguing that the SEC hasn’t made a compelling case for an appeal. The SEC has until September 8th to respond.
Here’s where Wendy’s analysis takes an intriguing turn. She suggests that if Judge Torres grants the SEC’s motion for interlocutory appeal and the SEC subsequently loses at the U.S. Court of Appeals for the Second Circuit, it could set a powerful precedent. Such a precedent would clarify that programmatic sales of crypto tokens on exchanges should not be considered securities. This would benefit XRP and have far-reaching implications for other tokens and crypto exchanges that facilitate altcoin trading. In this way, the SEC’s actions could inadvertently benefit the very industry they are attempting to regulate, effectively “shooting themselves in the foot.”
Wendy stressed that the outcome of this case could have a ripple effect (no pun intended) on the entire crypto market. If the SEC loses its appeal, it could establish case law that protects other crypto assets from being classified as securities when sold on secondary markets. This would provide much-needed regulatory clarity and could potentially “save crypto,” aligning with the bullish sentiment expressed in her video title.
Wendy did not hold back in criticizing the SEC for its approach to the case, describing it as wasteful and lacking a strong basis. She also referenced the recent Grayscale v. SEC case as another example of the SEC’s questionable competence, further supporting her argument that the SEC could be undermining its own objectives.
Wendy wrapped up her analysis by expressing frustration with the lack of regulatory clarity in the United States. She called for a system that allows the crypto community to elect representatives who can advocate for them in regulatory discussions.