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Coinbase Voices Bravado After Ripple Ruling: Is It Justified?

3 mins
Updated by Michael Washburn
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In Brief

  • The recent landmark ruling in the SEC vs. Ripple case has boosted optimism within Coinbase, who are engaged in their legal battle with the SEC.
  • The court's decision that XRP token purchases via exchanges were not securities transactions potentially strengthens Coinbase's arguments.
  • Despite the ruling classifying XRP sales to sophisticated investors as securities transactions, Coinbase remains confident its position will prevail.
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The recent court ruling in the high-profile United States Securities and Exchange Commission (SEC) vs. Ripple case has ignited a fresh wave of optimism among key players in the crypto industry, particularly Coinbase.

The landmark decision, hailing XRP token purchases via crypto exchanges as non-securities transactions, has potentially fortified Coinbase’s defense in its ongoing lawsuit with the SEC.

Coinbase Feels Confident in Case Against SEC

Paul Grewal, Chief Legal Officer at Coinbase, vocalized the company’s newly invigorated confidence following the Ripple ruling.

According to Grewal, the court’s determination significantly undermines the idea of securities being traded on crypto exchanges. Therefore, offering reassurance to both Coinbase and its regular investors.

“I think we will win. Now, I thought we would win before this decision. We think this decision has only further strengthened the case,” Grewal stated.

The Coinbase executive suggested that the judgment’s logic would still hold, even if the XRP token were substituted with any other cryptocurrency.

Yet, the ruling also flagged the sale of XRP to sophisticated investors or institutional clients as a securities transaction. It seemingly casted a shadow over Coinbase’s ambitions to expand its institutional trading platform.

Grewal, however, downplayed this concern, arguing that all investors can take solace from the fact that crypto exchange-traded tokens were not deemed securities in arm’s length dealing situations.

Investors Remain Optimistic About the Future of Crypto

The SEC’s stance on cryptocurrencies, mainly considering most of them as securities, has been contentious.

Cryptocurrencies must register with the SEC and adhere to stringent disclosure requirements if classified as securities. Thereby significantly expanding the SEC’s jurisdiction over these assets and related firms, such as crypto exchanges.

The ruling on XRP has seemingly weakened the SEC’s argument, attracting criticism from key industry figures. Tyler Winklevoss, co-founder of cryptocurrency exchange Gemini, slammed the regulator as a “failed institution.” Meanwhile, Grewal called for new rules to accommodate the new technology.

Analysts and investors now view Ripple’s partial victory as a positive signal for the crypto market as a whole.

According to BlackRock CEO Larry Fink, global demand for cryptocurrencies is significantly growing. He maintains that crypto can act as a new international asset class that can “transcend” any fiat currency appreciation.

“If you look at the value of the US dollar, how much it depreciated over the last two months, and how much it appreciated over the last five years… An international crypto product can really transcend that,” Fink said.

As the dust continues to settle in the wake of the SEC vs. Ripple case, the crypto community anticipates the potential ripple effects of Coinbase’s ongoing legal battle with the SEC.

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Bary Rahma
Bary Rahma is a senior journalist at BeInCrypto, where she covers a broad spectrum of topics including crypto exchange-traded funds (ETFs), artificial intelligence (AI), tokenization of real-world assets (RWA), and the altcoin market. Prior to this, she was a content writer for Binance, producing in-depth research reports on cryptocurrency trends, market analysis, decentralized finance (DeFi), digital asset regulations, blockchain, initial coin offerings (ICOs), and tokenomics. Bary also...
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