The SEC wants to protect witnesses in the case against Ripple
The SEC wants to protect witnesses in the case against Ripple
World News

The SEC wants to protect witnesses in the case against Ripple

By Vincenzo Cacioppoli - 14 Sep 2022

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The SEC has made a request to the court to secrete testimony brought by its attorneys in the lawsuit against Ripple to protect their identities.

SEC covers the identities of some of the testimonies in its favor against Ripple

It really seems to be a never-ending story that of the lawsuit filed now more than two years ago by the SEC against Ripple, with the accusation that the crypto company allegedly sold securities without having authorization. Having scored a few points in its favor in recent weeks, Ripple had been leaning toward a positive resolution of this long-standing issue.

The most important news, and one that seemed likely to be the final blow to end the dispute in its favor, was the decision by Judge Sarah Netburn, who is handling the case, to reject the SEC‘s motion that demanded that certain testimony favorable to Ripple not be considered. 

One of them was that of a former SEC executive himself, who had given a speech a few years ago in which he described cryptocurrencies as non-securities, thus bringing down the whole castle of accusations built by the SEC against the crypto company. 

But the US regulator definitely does not seem to want to give up the fight and is trying everything to lengthen the process, making it look like an attempt at stonewalling, similar to the effort made in July to block the testimony of 1,700 XRP token holders who wanted to testify on behalf of the crypto company. Similarly, it sought to render null and void the motion filed by Ripple to avail itself of video documentary evidence inherent in the matter at issue in the lawsuit. 

Despite Judge Netburn once again agreeing with Ripple in both cases, the SEC is still not giving up, and has now filed a new motion to seal testimony in its favor in order to protect the identity of the witnesses themselves.

The SEC’s goal, a long-term vision to regulate the crypto industry

According to the SEC, not secreting these testimonies could expose the witnesses to harassment by Ripple’s many supporters, but at most this appeared to be yet another attempt to stretch the process out of proportion while waiting for some news or evidence to come along that could reverse the course of the trial, which at this point looks increasingly likely to be favorable to Ripple.

The SEC’s history against Ripple is not the first case of an admittedly unfavorable attitude of the commission that oversees the US stock exchange towards cryptocurrencies. Its chairman, Gary Gensler, has long argued that cryptocurrencies should be considered as securities or commodities, depending on the type of crypto.  

Bitcoin, for example, would be considered a commodity, a factor due to its nature. 

For this reason, Gensler argues that the sector should be regulated and should still be subject to the rules adopted for any other type of financial security.

In this regard, the founder of CryptoLaw, John Deaton, going into the merits of the SEC’s lawsuit against Ripple, argued two days ago that the authority that regulates the US stock exchange is wrong in its lawsuit precisely because XRP would not be a security, but would instead be considered a commodity, like Ethereum, for example. 

The lawsuit against Grayscale, an ongoing fight against the crypto world

Gensler and the SEC also have to endure a recent lawsuit filed by Grayscale, a fund that has allegedly unsuccessfully filed for a spot ETF on Bitcoin for some time, as have about 20 other issuers. The SEC rejects these applications because it believes that these kinds of products on an unregulated currency would be too risky for investors.

On the other hand, the one between Gensler and the crypto world risks becoming a real no-holds-barred battle. In August, a dozen investors promoted an Internet petition, which garnered thousands of signatures in a matter of hours, calling precisely for the resignation of the SEC chairman. The petition would also refer to a potential conflict of interest of Gensler, who again according to the text of the petition, would have $100 million with certain financial firms that have long been waging their own personal battle against the cryptocurrency industry and its absolute lack of regulation.

But the question of regulation of the crypto sector is a very sensitive issue and one on which the crypto sector itself has long been demanding action from the authorities, which, however, is struggling to get off the ground, although in some countries in recent months we are seeing some interesting developments in this regard, as in the case of South Korea.

Crypto regulation in the world

South Korea may soon have a perfectly legitimate and regulated market just for digital assets in the same way as the traditional one. The administration of President Yoon Suk-yeol, who has always been regarded as an advocate of cryptocurrencies, said in early 2022 that it would work to legalize security token sales and initial coin offerings (ICOs). On the campaign trail, the president had repeatedly talked about the need to develop a cryptocurrency market and to pass ad hoc laws to regulate it and thus make it legal and secure.

The announcement, which is to be read as a consequence of a changed climate toward the crypto world in the country, came in recent days. It involves a partnership between the Korean city of Busan, with cryptocurrency derivatives exchange FTX to create a sort of cryptocurrency and blockchain hub in the city.

Even Japan is reportedly well advanced on new crypto regulation, while in Dubai the Virtual Assets Regulatory Authority (VARA) in March approved the first and precise regulation of digital assets in a city that looks set to increasingly become a world center for crypto assets.  

The European Parliament in July also finally approved MiCA, the new regulation for the digital assets market, which, however, is not expected to officially take effect until 2023. While the US continues to delay precise regulation of the sector, despite the fact that Biden passed an executive order two months ago specifically to push Congress to legislate on the sector and also push to explore the possible implications and possibilities of implementing a blueprint for a new digital dollar.

Vincenzo Cacioppoli

Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog., he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.

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