Gasparino expects an unfavorable outcome in crypto if Ripple loses its case against the SEC.
FOX Business senior correspondent Charles Gasparino has continued to share more unfavorable events that could befall the cryptocurrency sector if Ripple loses its case against the Securities and Exchange Commission (SEC).
According to Gasparino, an outright SEC win in the lawsuit could force other crypto projects aside from Bitcoin to register with the securities regulator.
“SEC win could force coins aside from $BTC to register,” Gasparino said in a recent tweet.
Coinbase Reveals How It Plans to Bypass SEC’s Crackdown
Gasparino’s predictions come as San Francisco-based exchange Coinbase revealed that it is already preparing to survive an SEC regulatory crackdown on crypto assets registered as securities.
Coinbase told FOX Business that it intends to use a broker-dealer method to offer cryptocurrencies registered with the SEC.
“@coinbase tells @FoxBusiness it’s developing a plan to survive a @SECGov regulatory crackdown on digital assets using broker-dealers to trade coins registered as securities, “Gasparino noted.
SCOOP: @coinbase tells @FoxBusiness it’s developing a plan to survive a @SECGov regulatory crackdown on digital assets using broker-dealers to trade coins registered as securities. Move comes as @SECGov case v @Ripple looms; SEC win could force coins aside from $BTC to register
— Charles Gasparino (@CGasparino) January 10, 2023
Coinbase expects other crypto projects to register with the SEC if Ripple loses its case against the SEC.
Ripple v. SEC Case
Recall that on December 20, 2020, the SEC gifted Ripple and XRP community members with an early Christmas present by charging the Silicon Valley tech company and two of its executives for offering unregistered security.
The case has lingered for more than two years. Interestingly, pro-Ripple lawyer James K. Filan predicted that a resolution could occur on or before March 31, 2023. The lawsuit between the SEC and Ripple is one of the significant events that could determine the nature of the United States cryptocurrency regulation.
Forbes describes the lawsuit as “the cryptocurrency trial of the century.” A win for the SEC could prompt the agency to continue its regulation by enforcement approach in the crypto industry. However, if Ripple wins the lawsuit, the SEC would be forced to establish clearer rules for the nascent industry.
In November 2022, the SEC recorded a significant victory in its case against peer-to-peer content distribution network LBRY. Since LBRY was also charged with offering unregistered securities in the U.S., many expect that Ripple would be slammed with the same judgment as LBRY.
Attorney John Deaton, who is representing XRP holders in the lawsuit, is confident that Ripple will win the case. According to Deaton, LBRY lost its case against the SEC because the peer-to-peer content distribution company did not challenge the second prong of Howey (Common Enterprise). He added that LBRY did not differentiate between secondary market sales of its token and the company’s direct sales.
Many Crypto Users Backing Ripple
Meanwhile, many crypto enthusiasts are backing Ripple to win the lawsuit. Per Gasparino, the cryptocurrency community fears that there could be a bloodbath in the market if the SEC wins. He noted that the bloodbath could be in the form of stringent regulatory oversight from the SEC that would affect every crypto sector, including the exchange business.
Commenting on Gasparino’s tweet, attorney Jeremy Hogan, a partner at Hogan & Hogan law firm, described Ripple as the “Jet Li” of crypto. He noted that the leading blockchain company put up the best defense money could buy, adding that “If Ripple’s kung-fu is not good enough, no one’s is.”
The SEC’s case was weak and ill-conceived from the start. Ripple put up the BEST defense money can buy. Ripple is literally the crypto communities’ Jet Li.
If Ripple’s kung-fu is not good enough, no one’s is.
— Jeremy Hogan (@attorneyjeremy1) January 11, 2023
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