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Ripple Lawsuit News: SEC to Decide if XRP Deserves Same Treatment as Ethereum
The ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple is nearing its end, with a settlement potentially on the horizon, according to sources shared with Fox Business’ Eleanor Terrett. This development comes after a court ruling in August 2023 imposed a $125 million fine on Ripple and prohibited the company from selling XRP to institutional investors.
Ripple’s legal team is currently engaged in negotiations with the SEC, pushing for more favorable terms. However, the delay in the settlement is reportedly due to Ripple’s desire to alter the court decision. According to reports, the company does not want to admit wrongdoing if it accepts the current terms. On the other hand, the SEC is now uncertain about whether any wrongdoing actually occurred.
In a recent tweet, financial journalist Charles Gasparino revealed that one crucial issue being weighed by the commission is whether XRP should be treated similarly to Ethereum. Both Ripple and Ethereum raised funds through Initial Coin Offerings (ICOs) for their respective platforms. While Ethereum escaped legal action because it became a commodity, Ripple got sued over its ICO.
The debate now centers on whether XRP can also be considered a commodity like Ethereum. Gasparino wrote that the SEC is contemplating the comparison between the two cryptos. The commission believes Ethereum trades as a pure commodity and is attempting to determine if they can make a similar case for XRP.
Pro-XRP lawyer John Deaton has urged the SEC to consider several points before making a final decision. He highlighted a 2018 article by former Chairman of the Commodity Futures Trading Commission, Giancarlo, which argues that XRP is not a security. Additionally, he pointed out a 2018 SEC analysis that neither labeled XRP as a security nor suggested enforcement actions against Ripple.
Deaton also cited a letter from former SEC Commissioner Joe Grundfest in 2020, questioning why XRP is being treated differently than Ethereum.
The stakes are high for both parties involved, and it remains to be seen whether the SEC will ultimately decide that XRP should be afforded similar treatment as Ethereum.
