In the ongoing Ripple-SEC case, both parties have asked presiding Judge Torres for a ruling in their favor without a trial. The motions for summary judgment have been fully briefed, and now the ruling is awaited.
Following the bankruptcy of FTX exchange in November, customers and investors faced potential losses of billions of dollars.
Before his arrest, Sam Bankman-Fried, the founder of FTX, developed strong relationships with U.S. lawmakers and supported legislation that would have given the Commodity Futures Trading Commission (CFTC) control over some tokens.
This was seen by some as an attempt to take control away from the Securities and Exchange Commission. One pressing topic keeps coming up in the wake of the collapse of crypto exchange FTX: Who should regulate the industry?
Many believe that the Ripple lawsuit's imminent decision could help determine the answer and also the future of many crypto investors and businesses. The key question in the case is whether XRP should be classified as a security, in which case it would come under the Securities and Exchange Commission's purview.
Here are expectations following FTX collapse
A decision in the Ripple lawsuit is expected in the first half of 2023, according to Ripple CEO Brad Garlinghouse and General Counsel Stuart Alderoty.
According to James K. Filan, the ruling could come as early as March 2023. Whenever the decision is made, Stuart Alderoty thinks it will have a big impact on the future of cryptocurrency in the U.S.
An upcoming ruling could help determine the answer to an urgent question: Who should regulate the crypto industry? https://t.co/bpH97Hh7QH— Bloomberg Crypto (@crypto) January 18, 2023
Bloomberg reports the opinion of some observers. "The recent turmoil in crypto markets could taint the court’s view," said Joseph Hall, a partner at Davis Polk & Wardwell, who worked at the SEC from 2003 to 2005.
"You just have to imagine that the judges will be influenced by the investor losses they’ve seen. And the SEC will make clear to them that if you rule the other way, we will not have the tools that we need to fight this kind of activity," Hall added.
Even if Ripple triumphs, it might not be the ticker-tape parade moment that crypto enthusiasts are hoping for, said Andrew Stoltmann, a Chicago-based securities litigation lawyer.
"I anticipate Congress will come in over the top and basically decide who gets jurisdiction with respect to enforcement," Stoltmann added.