XRP, the seventh-largest cryptocurrency by market capitalization, has seen a dramatic 24-hour surge, with trading volumes skyrocketing over 40%. This unexpected spike comes on the heels of new developments in the high-stakes legal battle between Ripple and the SEC.
SEC Update: A Turning Point?
Just last week, the SEC announced its intent to submit its principal brief in the ongoing appeals process by January 15, 2025. While this legal battle unfolds, discussions within the legal community on X have intensified, with lawyers weighing in on the potential classification of XRP.
XRP’s Classification Horror Continues
XRP remains at the center of a legal dispute regarding its classification as a security. Lawyer Bill Morgan, known for his critical stance on the SEC’s arguments, has challenged the notion that the Appeals Court might label XRP as a security.
Morgan’s analysis centers around the “embodiment theory,” which suggests that XRP should be viewed as an asset rather than a security. He emphasizes that Judge Torres’s ruling, which determined that XRP itself is not inherently an investment contract, was appropriate. This approach, he argues, is more logical even if it diverges from current crypto case law or the SEC’s position.
Also Read: 21Shares Files for XRP ETF: A Potential Game-Changer for Ripple’s Native Token
The Implications of a De Novo Review
James Farrell, another legal expert, notes that a “de novo” review by the Appeals Court could lead to various outcomes, including adopting the “embodiment theory” or reinterpreting XRP’s classification. This could potentially align with Judge Rakoff’s ruling in the Terra case, where assets like UST and LUNA were deemed securities based on their use in investment contexts.
While the Appeals Court has the power to reassess the situation, Morgan warns that any move to consider XRP itself as a security would misinterpret the judge’s focus on the distinction between the asset and the transaction.
The outcome of this legal battle could have significant implications for XRP and other cryptocurrencies, as it raises fundamental questions about the classification of digital assets and whether they are inherently securities or only become such within specific transaction contexts.
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.
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