Cryptocurrency exchange Coinbase has filed an amicus brief in support of Ripple Labs in the U.S. Securities and Exchange Commission’s (SEC) case regarding xrp. Coinbase’s support is seen as an important step in the case, given that the crypto exchange was one of the first trading platforms to delist xrp following the SEC’s lawsuit.
Coinbase Supports Ripple Against SEC
Nasdaq-listed cryptocurrency exchange Coinbase filed an amicus brief Tuesday in support of Ripple Labs before the U.S. Securities and Exchange Commission (SEC). The regulator sued Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen over the sale ofXRP, claiming the crypto token is a security. Since the
SEC lawsuit was filed, “several U.S. exchanges have delistedXRP. delisted XRP. As a result, its market value has decreased by $15 billion, causing significant losses to Coinbase’s customers,” Coinbase’s attorneys explained in their filing, noting that.
In the absence of a regulatory framework governing digital assets, Coinbase believes that parties like Ripple must be allowed to pursue a fair notice defense in matters such as this one, where they face surprise enforcement actions.
In its amicus brief, Coinbase argued that “existing due process precedent prohibits unexpected enforcement actions” and that “SEC rulemaking is essential to account for new technologies in the crypto space.” He stated. He further stated that “in the absence of cryptographic rulemaking, a robust fair notice defense is critical.”
“Until the SEC engages in rulemaking for cryptocurrencies,” Coinbase argued, “a fair notice defense is a constitutionally necessary check against arbitrary and capricious cryptocurrency enforcement actions.” In the absence of such regulation … . preventing Ripple’s fair notice defense from even being heard in court would not only undermine Ripple’s ability to avail itself of the defenses afforded by the fundamental doctrines of due process, but would also give the SEC no incentive to engage in the rulemaking work that the cryptocurrency industry and its customers need.” Id.
Many on social media have expressed that the Coinbase move is significant given that the crypto exchange was the first to be delisted. delisted XRPfollowing the SEC’s lawsuit against Ripple. Securities regulators announced the lawsuit on December 22, 2020, and Coinbase suspended trading in; on January 19, 2021, it suspended trading in XRP
Gabor Gurbacs, Strategy Advisor at Vaneck/MVIS, commented:” Coinbase stopped tradingXRP when the SEC sued Ripple XRP is a security, the SEC claimed, so Coinbase stopped trading XRP. Many other platforms followed suit in delistingXRP. Now Coinbase supportsXRP vs. SEC; lesson: obey the law&but don’t try to be the judge/regulator.”
Tony Edward, host of the Thinking Crypto Podcast, tweeted.
I don’t think people understand how important it is for Coinbase to file an amicus brief for Ripple in the SEC case. I think the entire industry sees Ripple winning.
Last month, Ripple’s CEO said he expects an answer in the SEC lawsuit in the first half of 2023. He noted that Ripple would consider settling with the SEC if regulators said XRP was not a security. The executive highlighted the XRPcase, stating that the XRPcase is “about the whole (crypto) industry.”
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