A recent article from Bloomberg, written by the owner of advocacy company Cecere PC and Bloomberg lawyers state that the SEC suit against Ripple Labs is harmful for the development of the crypto industry in the U.S.
The lawsuit against Ripple
The legal action was brought by the Securities and Exchange Commission against crypto giant Ripple Labs in late December 2020.
The agency, represented by former chair Jay Clayton, accused Ripple and two of its high-profile executives—Brad Garlinghouse and Chris Larsen—of making continuous sales of "unregistered securities" and "investment contracts." XRP was claimed to be both.
As a result, multiple top-tier crypto exchanges refused to continue XRP trading and suspended it. Among these platforms were Bittrex, Coinbase, Binance US and Bitstamp.
XRP dropped in price and was pushed to the back of the top 10 list by market capitalization.
However, the newly appointed SEC chairman, Gary Gensler, plans to focus on crypto regulation, and he has the opportunity to withdraw this legal complaint, the authors of the article believe.
The reason is that this legal suit is jeopardizing crypto innovation in the United States. Besides, Gensler used to teach a course on blockchain at MIT, and he is aware of how important the development of DLT and crypto is for the U.S. now, especially in light of China already making trials of the digital yuan.
Standing to justify XRP as non-security
The authors have reminded readers what a security actually is (something that makes a holder an owner of a stake in the company) and proving that XRP is not that. They also offer their arguments against the coin being called an investment contract.
XRP is important, as per the article, as it is superior to major cryptos Bitcoin and Ether (which the SEC has classified as non-security assets) in terms of transaction speed, low cost and the absence of a carbon footprint caused by mining.