Cryptocurrency

Ripple CLO Slams SEC After Another Major Loss

The recent ruling by the Federal Court for the Northern District of California in the Kraken case has significant implications for the U.S. Securities and Exchange Commission’s (SEC) regulatory strategy.

The court’s decision shows a growing judicial consensus that digital tokens, by themselves, do not constitute securities. This development follows a similar ruling in the Ripple case from July 2023, further challenging the SEC’s enforcement tactics and its conceptualization of “crypto asset securities.”

In a statement posted on X, Stuart Alderoty, Ripple’s Chief Legal Officer, highlighted the importance of the ruling, stating, “Another court, this time in the Kraken case, confirms there’s no such thing as a ‘crypto asset security.'”

Alderoty’s remarks reflect the broader crypto community’s view that the SEC’s regulatory approach, which hinges on treating certain digital assets on exchanges like Kraken as securities and attempting to enforce this through lawsuits, is fundamentally flawed.

Details of the Kraken Ruling

Marco Santori, Kraken’s Chief Legal Officer, provided a detailed account of the court’s findings, explaining that the court ruled “as a matter of law, that none of the tokens trading on Kraken are securities.” This decision, Santori argued, is “a significant win for Kraken, for the principle of clarity, and for crypto users everywhere.”

The court’s ruling also critically opposed the SEC’s legal reasoning. Santori noted that the court found the SEC’s concept of a “crypto asset security” to be “unclear at best and confusing at worst,” similar to Judge Netburn calling the SEC’s strategy arbitrary and capricious.

Additionally, the court questioned the SEC’s argumentative approach, particularly its insistence on mischaracterizing Kraken’s position by suggesting that a written contract is necessary for a token to be classified as a security.

Despite these significant victories for Kraken, the court has allowed the case to proceed to discovery. The ruling draws an essential distinction, as seen in the Ripple case, between the nature of a token and the agreements or arrangements surrounding its issuance and sale.

According to Santori, “A token isn’t a security, but agreements around a token could be.” This distinction may compel the SEC to pivot away from its broad categorization of tokens as securities and instead focus on the specific circumstances under which tokens are offered or sold.

For the SEC, this ruling represents a substantial setback. The broader implications of this ruling extend beyond Kraken and the SEC. Santori concluded that the ruling confirms that “the SEC cannot credibly regulate crypto by enforcement.” He called on Congress to step in and provide a comprehensive regulatory framework for the cryptocurrency industry.

Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.


Follow us on Twitter, Facebook, Telegram, and Google News

Tobi Loba

Tobi Loba is a passionate writer with a vast interest in the stock market. She joined the crypto ecosystem about three years ago and has written lots of ebooks and articles in relation to cryptocurrency and blockchain projects. Tobi Loba earned her degree at the University of Ibadan.

Recent Posts

ETFSwap (ETFS) Named As Leading Altcoin To Overtake XRP In Crypto Top 10 After Surging 25,000% In 2 Months

The ETFSwap (ETFS) token has emerged as a standout altcoin, threatening the position of established…

4 hours ago

SEC vs. Spot Exchange-Traded Funds (ETFs) In 2025? 3 Safe Investments You Should Do Before Market Pumps Like 2021

Speculation about the SEC’s 2025 approval of Spot Exchange-Traded Funds (ETFs) has excited investors for…

7 hours ago

This History Teacher Hit His $1M Dream By Investing In These Low-Cap Altcoins; Last One Could Explode 50x This December

One right investment choice could change an investor's life, especially in cryptocurrencies, which are rapidly…

8 hours ago

Qubetics Projected to Hit $10-$15 While Cardano and Zignet Develop Blockchain Strategies

As blockchain continues to evolve, one major challenge remains: how can projects ensure security while…

10 hours ago

PropiChain Quickly Rises to the Top of Token Presales in 2024, Why it Became a Must-Have for Crypto Investors

Recently, unfavorable market conditions have led crypto investors to seek new token presales for a…

12 hours ago

ChatGPT’s Surprising Forecast for Q1 2025: New DeFi Coin to Lead the Market (Hint: No Solana or Uniswap)

Forecasts for early 2025 hint at an unexpected leader in the decentralized finance market. Contrary…

13 hours ago