CFTC Commission Indicates Ripple Landmark Win in SEC Case as a Step to Crypto Regulation Clarity

Jimmy Aki
Last Updated:

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.

Caroline Pham, the Commissioner of the Commodity Futures Trading Commission (CFTC), has expressed optimism about the crypto regulation clarity in the United States. This came on the heels of the recent victory of Ripple Labs in the SEC lawsuit over the $XRP token.

SEC & CFTC Alliance May Provide a Refined Holistic Approach to Crypto Regulation

On July 17th, Caroline Pham told Bloomberg TV that recent court decisions, notably the Ripple win against the Securities Exchange Commission (SEC) over $XRP, will clarify the classification of digital assets.

The statement was made at the Graduate Management Admission Council (GMAC) leadership, members, speakers, and Commodity Futures Trading Commission (CFTC) staff meeting.

The leadership conference had coverage from Bloomberg TV and other notable broadcasting firms.

Pham, one of the five commissioners of the CFTC, stated that insights into data and market observation, tech developments, and structure reforms were discussed in the meeting, alongside recommendations.

The lack of clarity surrounding the classification of digital assets as securities by U.S. regulators has been a persistent challenge in the cryptocurrency space.

Pham acknowledged this issue and expressed her eagerness to engage in regulatory working groups to address the ongoing back-and-forth lawsuits, lengthy court cases, and the overall lack of clarity in the digital asset domain.

The commissioner also expressed her high enthusiasm for the SEC and CFTC to form an alliance and provide a holistic approach to the crypto industry.

The SEC has recently taken actions to regulate the crypto sphere, including filing lawsuits against major exchanges like Coinbase and Binance.

On June 5th, the SEC charged Binance and its CEO over trading unregistered securities and misrepresenting trading control of its U.S. subsidiary platform, Binance.US.

Coinbase had its share the following day as it was also charged for operating as an unregistered securities exchange, brokerage, and clearing agency.

However, Judge Analisa Torres of the U.S. Southern District of New York ruled on July 14th that $XRP, the native crypto asset of Ripple Labs, is not a security when sold to investors via crypto exchanges.

Pham’s comment on Bloomberg TV is beyond doubt based on the recent unfolding of the Ripple Labs vs. SEC court case.

SEC to Be Blame for the Dearth of Crypto Exchanges and Companies

The rise of decentralized finance (DeFi) has revolutionized how investors perceive finance and embark on commercial ventures.

Within the vast realm of DeFi, the cryptocurrency space has emerged as a key sector, fueling rapid growth, innovation, and financial opportunities.

While the crypto industry has yielded substantial returns for traders and spurred the expansion of crypto exchanges in the United States, the Securities and Exchange Commission (SEC) has hindered the growth.

The SEC’s definition and classification of digital assets have resulted in the closure of cryptocurrency firms within the country.

On February 9th, the regulator filed a lawsuit against Kraken, an American-based crypto exchange, alleging the sale of unregistered assets and imposing a penalty of $30 million.

Subsequently, Coinbase CEO Brian Armstrong hinted at the possibility of relocating to a new regional hub if the SEC’s regulatory rules failed to provide clarity, as reported by Cointelegraph on April 18th.

Following suit, Bittrex ceased its operations in the U.S. on April 30th due to the lack of regulatory clarity in the crypto space.

If left unchecked, this trend may lead to the United States being blacklisted as a restrictive environment for crypto companies, impeding the progress of blockchain innovations in the region.

Ripple Labs’ victory against the SEC may be the start of clarity in crypto regulations. Analysts believe the legal ruling signifies the U.S. legal department’s interest in digital asset regulations.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.