Could XRP be relisted on Coinbase soon?
The U.S. Securities and Exchange Commission (SEC) appears to be experiencing a prolonged and gradual death from a thousand paper clippings regarding its lawsuit against Ripple, which alleges Ripple’s XRP cryptocurrency is unregulated security. When the SEC filed its complaint last December, many pundits and analysts felt it was the death knell for XRP, as it was delisted from most crypto exchanges around the world. With few opportunities to raise legal funds due to write-offs, many believed that XRP could RIP.
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XRP is fighting
Not so fast. It looks like the rambling legal team representing XRP showed more fierce determination than a bundle of Dogecoins facing off against a stack of Shiba Inus. Since the SEC’s announcement of the case, the value of XRP has tripled and individual investors have flocked.
That’s because XRP has always been able to rack up a bunch of modest procedural wins and favorable rulings from US investigating magistrate Sarah Netburn, who is presiding over the case. One of those minor victories was the court order for the SEC to produce its regulatory guidance for cryptocurrencies after XRP alleged that SEC officials admitted at a meeting that no regulatory guidance formal did not exist prior to 2019. XRP had been available to retail and institutional investors since 2012. XRP’s legal team asked how XRP could break the law if there were no formal regulations for seven years? (Ouch, paper clippings are the worst – am I right?)
But the SEC continues to counter and maintains that XRP is unregistered security and therefore illegal. The wrinkle to this argument at the heart of the SEC case is that there is a clear test to determine whether an investment contract exists, which makes it a security. Called the Howey Test, it became a precedent following the SEC v. WJ Howey Co., rendered by the Supreme Court in 1946. The four points of the test to determine whether an investment contract exists are:
- An investment of money
- In a joint venture
- Looking forward to profit
- Being derived from the efforts of others
The law requires the four dots to be true, and XRP asked Judge Netburn to order the SEC to scan thousands of pages of over 1,500 transactional contracts to try and prove the four dots exist somewhere in the language. of these contracts. Last week, Justice Netburn granted XRP’s request. If the SEC refuses, his case is demoted to a circumstantial rather than a factual one. (No more paper clippings!)
Coinbase CEO shares his thoughts
Interestingly, Coinbase CEO Brian Amstrong has been relatively silent on XRP proceedings for months until this week, when he sent a bullish tweet to his nearly 890,000 followers on Twitter. “The Ripple case appears to be going better than expected. Meanwhile, the SEC realizes that attacking crypto is politically unpopular (because it hurts consumers),” Armstrong said. He added: “The irony is that the people they are supposed to protect are the ones attacking them.
Armstrong’s tweet linked to an unflattering article published in August about the unexpected backlash of millions of retail investors against the SEC – the very constituency the SEC is supposed to protect. The Public Opinion Tribunal’s backlash criticizes the SEC’s years of confused and contradictory guidance on cryptocurrency assets and its confused mismanagement of the current Ripple case.
How will the SEC proceed?
Clearly, this is not how SEC Chairman Gary Gensler wants or expects this high profile affair to play out. One of the less well-kept secrets in Washington, DC is that he is preparing to join the White House cabinet as the next Secretary of the Treasury – a role he has had in view since taking over. served in this agency during the Obama administration. The outlook would be bad if an SEC led by Gensler lost its “slam-dunk case” to a spirited crypto startup. It’s not impossible to think that the SEC might seek a face-saving settlement with Ripple so its chairman has a better chance in the cabinet post. A regulation would also pave the way for the resurrection of XRP on crypto exchanges such as Coinbase.
The final point to consider that suggests XRP could be available on exchanges was a tweet from Coinbase Pro in early September after several XRP assets magically appeared on the professional version of the mobile exchange and then disappeared shortly thereafter. . “As previously announced, Coinbase has suspended trading of XRP. Due to a technical issue, XRP was temporarily visible on the Coinbase Pro mobile app to some customers, but was not tradable.”
Despite this mea culpa, it seems obvious that Coinbase and its CEO are preparing for a possible relist of XRP – pending a settlement from the SEC. To paraphrase Mark Twain, it seems the reports of XRP’s death have been exaggerated. Meanwhile, death by a thousand paper cuts is still in legal balance regarding the SEC case.