Industry insiders and law experts call out the SEC for its despotic approach with Ripple and crypto firms
The United States Securities and Exchange Commission (SEC) rigid approach is being condemned by market participants, legal experts, and industry insiders. Almost all accused the agency of being autocratic and lacking information to judge Ripple and some crypto companies.
This isn’t about Ripple: Crypto community reacts to SEC’s actions
Not long ago, the SEC has filed its Opposition to Ripple’s Motion to Compel it to answer how the Howey Test was applied to virtually all of Ripple’s transactions in XRP over the last eight years.
“Defendants waited until the end of fact discovery, more than seven weeks after receiving the SEC’s first interrogatory responses to inform the SEC they considered the responses deficient. The SEC then supplemented five of the responses at issue, met and conferred, and asked Defendants to identify what specific information they still require”, the filing stated.
With Ripple being ordered to produce more of its Slack messages, the firm seems to be challenging the SEC to produce information that will prove the applicability of the Howey test. However, according to the regulators, the four prongs of the test have been satisfied.
In the motion as mentioned above, the SEC added, “The SEC has substantively answered the interrogatories at issue as required by the Federal Rules of Civil Procedure and this Court’s recent guidance that a party need not catalog every fact or piece of evidence so long as it identifies representative samples and provides… meaningful disclosure.”
In addition, the SEC also asserted that Ripple’s argument stemmed from a complaint they did not like the answers they received. The agency added that the interpretation of the applicable law by the SEC and defendants is different.
The SEC’s opposition did not sit well with the community, with many questioning the SEC not explaining itself.
Wait so they have to prove that the Howey test applies to these transactions but they won’t explain themself, even tho they filed the lawsuit…?
— Zwig (@Scubaaaastevee) September 8, 2021
As reported by AZCoin News, Coinbase is currently under regulatory scrutiny because their new product violates the compliance framework, despite months of efforts committed to the SEC. And also, recently, the SEC decided to charge Rivetz with operating an illegal and unregistered securities offering.
These continued actions by the SEC have sparked outrage from the crypto community. Some argue that the SEC’s methods lack transparency and authenticity, leading some to question whether the agency has any goodwill to regulate or the ultimate goal is total control and destruction.
In the case with Coinbase, the SEC allegedly failed to communicate any details regarding the product’s assessment, for which they used the prism of decades-old Supreme Court cases called Howey and Reves.
James K. Filan, a former federal prosecutor for the US Attorney’s Office for the District of Connecticut, tweeted.
Source: James K. Filan
The exchange also stated that the agency considered Lend to involve security but wouldn’t say why or how they’d reached that conclusion. After the SEC filed suit against Ripple, Coinbase promptly removed XRP from its platform, but now some see this as an opportunity to join forces.
Source: Jesse Hynes, Chief Legal Officer at Gala Games
Not too long ago, this seemed like a good idea, and Coinbase followed suit when some users discovered four XRP trading pairs (XRP/BTC, XRP/USD, XRP/GBP, and XRP/EUR) started showing up on the mobile app of the Coinbase Pro exchange. However, Coinbase Pro swiftly moved to shut down the relisting rumors.
- XRP Was Viewable On Coinbase Pro But Was Not Tradeable, Price Rose Above $1.24 Then Quickly Dropped 10%
- The SEC Charged Rivetz Over An Alleged Illegal Securities Offering That Fetched Around $18 Million