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Ripple Lawsuit Gains Importance in the Face of SEC Scrutiny on Coinbase and Binance

Key Takeaways
  • Outcome of SEC v Ripple case could impact lawsuits against Coinbase and Binance.
  • Ripple case ruling may weaken SEC's cases against the exchanges.
  • Ripple case outcome not binding, but closely watched for its influence on the industry.
09-Jun-2023 By: Aditi Tiwari
Ripple Lawsuit Gains

The outcome of the SEC v Ripple case is expected to have significant implications for the ongoing lawsuits against Coinbase and Binance, according to crypto lawyers. 

As Ripple continues its legal battle with the SEC over allegations of offering unregistered securities via XRP, the judges presiding over the Coinbase and Binance cases are likely to closely monitor the developments.

Since December 2020, Ripple has been entangled in a legal dispute with the SEC. The regulatory agency contends that Ripple violated securities laws by offering XRP as unregistered securities since 2013. The recent SEC lawsuits against Coinbase and Binance, filed on June 6 and June 5 respectively, share some similarities with the allegations against Ripple.

Crypto lawyer James Murphy, known as "MetaLawMan," highlighted on Twitter that a favorable ruling for Ripple could undermine the SEC's case against  Coinbase and Binance. However, he also clarified that the outcome of the Ripple case would not be binding precedent for the recent filings against the two exchanges. Only decisions by the Court of Appeals and the Supreme Court hold such influence.

Lawyer John Deaton, a pro-XRP advocate, believes that the SEC is aware that Judge Torres' decision in the Ripple case will be published soon. Deaton suggests that the SEC filed the lawsuits against Coinbase and Binance preemptively, in case it faces an unfavorable outcome in the Ripple case. He suggests that the timing of the new cases is a strategic move by the SEC to avoid losing political and legal momentum.

Ripple Case Outcome Could Shape Coinbase and Binance Lawsuits, Legal Experts Say

According to Murphy, Judge Reardon, assigned to the Coinbase case, is likely to closely follow the determination of whether XRP is deemed a security or not. As both cases are being heard in the same Lower Manhattan court, Reardon's decision could influence the evaluation of whether the 13 tokens mentioned in the Coinbase complaint are securities. The outcome can go in either direction, favoring the SEC or the defendants.

Bill Morgan, an XRP-friendly lawyer and consultant at Morgan Mac Lawyers, suggests that the Ripple case outcome can be used as an advantage for either the industry or the SEC, depending on the result. A significant loss for the SEC in the Ripple case could provide Coinbase and Binance with leverage against the allegations of offering unregistered securities.

John Deaton predicts that the SEC's actions against crypto firms may soften once major financial institutions secure a larger share of the crypto market. He suggests that when traditional players like JPMorgan and Goldman Sachs become more involved in cryptocurrencies, the SEC may adopt a more reasonable approach.

In conclusion, the ongoing Ripple case is closely watched by legal experts as its outcome will likely impact the lawsuits against Coinbase and Binance. A favorable ruling for Ripple could weaken the SEC's cases against the exchanges. However, it should be noted that the Ripple case's outcome is not a binding precedent, and decisions from higher courts carry more significant influence. The crypto community eagerly awaits the Ripple case decision and its potential ramifications for the broader industry.

Also read- Bitcoin Magazine Founder's Advice: Withdraw Funds from Exchanges for Protection

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