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Why is the SEC's XRP lawsuit more important than ever?

  • The United States Securities and Exchange Commission (SEC) filed multiple charges against the SBF.

  • SEC chairman Gary Gensler said in a statement that the agency will sue more cryptocurrency companies that violate US securities laws.

15-Dec-2022 By: Sudeep Saxena
Why is the SEC's XRP

John Deaton, an attorney for XRP, said he didn't think this would

End up being linked to the FTX fraud.

The best good news for the cryptocurrency sector in a very long time was the arrest of Sam Bankman-Fried (SBF), the former CEO of FTX. Just before the day of his hearing before Congress, he was taken into custody by Bahamian authorities. A lawyer participating in the XRP litigation, however, has stated that there would be a few more significant events before the arrest.

SBF simply tagged along with SEC?

The Securities and Exchange Commission (SEC) of the United States brought numerous complaints against the SBF. The ex-CEO of FTX was charged by the commission with breaking securities laws, arranging a plot to mislead equity investors, and other offences.

According to Stuart Alderoty, general counsel of Ripple, the SEC's tag-along case against SBF is solely intended to recoup money for FTX's equity holders. Customers who were left holding the bag during bankruptcy court are not the target of this.

Is the XRP lawsuit the SEC's only hope?

Gary Gensler, the chairman of the SEC, stated in a statement that the organisation is prepared to pursue legal action against additional cryptocurrency companies that are breaking American securities rules.

John Deaton, amicus curiae and the attorney for an XRP holder, said that four months prior he had projected that the SEC would file a lawsuit against an exchange by the end of this year. But the commission later filed a lawsuit against Coinbase.

The attorney for XRP stated that he did not anticipate that this would be linked to the FTX fraud. Gensler has been preparing to sue an exchange or exchanges concurrently for months. This could occur by the end of the first quarter of 2023, but it is not the end yet.

He continued by saying that the SEC's involvement in the Ripple XRP litigation is now more crucial than ever after failing to take action against the FTX and SBF. Since this would essentially be the agency's last opportunity to impose rules on the cryptocurrency sector.

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