In the legal dispute over whether XRP is a security token, i.e. a security, Ripple could have now made a decisive breakthrough. The competent court authorizes a key speech by former SEC director William Hinman. She argued that ether does not fall under the Securities Act. Ripple could now benefit from this.
Breakthrough in XRP disputes?
Specifically, it is a speech Hinman gave at the 2014 Yahoo Finance All Markets Summit. are not securities transactions”. Hinman cited the “decentralized structure” of the Ethereum network as the reason. Applying federal securities laws to ether transactions would have “little added value.”
The SEC previously opposed a court order to release internal documents related to the speech. The court rejected that: “The court denies the SEC’s objections and orders the SEC to comply with the orders,” according to a Sept. 29 filing.
The approval could bring a watershed moment in the nearly two-year-long legal dispute over XRP, and with it the fundamental question of how cryptocurrencies should be regulated in the United States. Ripple also relies on the decentralized issuance of XRP tokens. If the court follows Hinman’s reasoning, the cryptocurrency would also not fall under securities law.
A precedent for the crypto industry
The outcome of the precedent could also be of great importance for Ethereum. SEC Chairman Gary Gensler recently pointed out the similarities between staking proceeds and dividend payments. With the transition of the Ethereum blockchain to Proof of Stake, Ether can be classified as a security, according to Gensler. If Ripple exits the field as the winner, Gensler’s recent statements would be on shaky ground.
However, it is still unclear when a verdict will be delivered. More recently, Ripple and the SEC pushed for a quick end by demanding summary judgment. With the current approval of the documents, the deadlocked legal dispute could continue to drag on.
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