Participants in the crypto market continue to clamor for clear crypto rules from U.S. regulators, particularly from the SEC, infamous for charging crypto firms with violating federal security laws.
A significant breakthrough emerged when U.S. District Judge Analisa Torres ruled against the SEC in July 2023 that XRP is not a security. However, the SEC recently secured a victory over crypto exchange Coinbase regarding how crypto assets may classify as security.
In particular, U.S. District Judge Katherine Failla sided with the SEC by ruling that tokens sold on exchanges like Coinbase qualify as investment contracts. Meanwhile, Judge Torres rejected this view in the XRP case. She ruled that such transactions occur through blind bid/ask trades and, hence, do not classify as investment contracts.
These opposing rulings from two federal courts in the United States have sparked speculations that a higher court could reverse the XRP victory ruling. Charles Gasparino, a senior correspondent at FOX Business Network, recently raised this possibility, citing securities lawyers. However, other prominent legal figures in the community keenly contested the view.
Accordingly, these uncertainties have led to speculation that the crypto industry may have to move up to the U.S. Supreme Court to get clarity on how to categorize crypto assets. Amanda Tuminelli, the Chief Legal Officer at the DeFi Education Fund, weighed in on the discussion in a podcast with Tony Edward.
According to Tuminelli, the issue is likely headed for the Supreme Court. She pointed out that if the Fifth Circuit Court of Appeals diverges from the Second Circuit’s decision, it would create a circuit split. In such a scenario, the Supreme Court typically resolves the split.
Moreover, the legal expert explained that the quickest route for the cases to reach the Supreme Court would be if appeals occur in different regions and yield conflicting outcomes. Such a development makes it imperative for the Supreme Court to intervene and provide a definitive ruling.
