Ripple Lawsuit Twist: SEC Debates Whether XRP Deserves Ethereum’s Status

Ripple-vs-SEC

The long-running legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple appears to be nearing its final stages, with a potential settlement on the horizon. According to sources shared with Fox Business’ Eleanor Terrett, Ripple’s legal team is actively negotiating for more favorable terms following an August 2023 court ruling.

The ruling imposed a $125 million fine on Ripple and restricted the company from selling XRP to institutional investors. However, Ripple is pushing for adjustments to the court’s decision, arguing that the SEC’s changing stance on crypto regulations should be reflected in its case. Reports suggest Ripple wants to avoid any settlement terms that could imply an admission of wrongdoing, particularly as the SEC itself appears uncertain about whether XRP actually violated securities laws.

XRP vs. Ethereum: A Key Discussion Point

Fox Business commentator Charles Gasparino has highlighted a critical issue in the ongoing negotiations: whether XRP should be treated similarly to Ethereum. Both cryptocurrencies were initially sold through Initial Coin Offerings (ICOs), yet only Ripple faced legal action, while Ethereum was categorized as a commodity. The SEC is now reportedly reassessing XRP’s classification in light of Ethereum’s treatment.

“What is being discussed now is the comparison between the two cryptos. The SEC believes ETH trades as a pure commodity. They are trying to determine if the commission can make that case with XRP,” Gasparino stated.

Pro-XRP Lawyer Deaton Challenges SEC’s Position

Pro-XRP attorney John Deaton has urged the SEC to consider several key arguments before finalizing its decision:

  • A 2018 article by former Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo suggested XRP is not a security.
  • A 2018 internal SEC analysis did not classify XRP as a security nor recommend enforcement actions.
  • Former SEC Commissioner Joe Grundfest questioned why XRP was being treated differently from Ethereum in a 2020 letter.

With Ripple’s legal team fighting for a fair resolution, the crypto industry is closely watching whether this settlement could redefine how digital assets are regulated in the U.S. The outcome could set a precedent for future SEC actions against other blockchain projects.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

Also Read: Ripple Secures Full Regulatory Approval for Crypto Payments in Dubai

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