Ripple celebrates the U.S. Securities and Exchange Commission (SEC) dropping its appeal, but the Crypto Assets regulatory rules are still not clear.

Source: Cointelegraph Original: "Ripple celebrates the U.S. Securities and Exchange Commission (SEC) dropping its appeal, but cryptocurrency regulatory rules remain unclear"

Ripple welcomes the U.S. Securities and Exchange Commission's decision not to appeal the case against the company, but this offers limited assistance in terms of legal certainty for the cryptocurrency industry.

The U.S. financial regulatory agency has clearly given up its appeal against Ripple, the issuer of XRP(. Industry insiders see this case as a typical example of overregulation by the U.S. Securities and Exchange Commission under the leadership of current Chairman Gary Gensler.

Ripple CEO Brad Garlinghouse stated that this decision "provides great certainty for Ripple". Although the case is effectively over, the company still needs to address some lingering issues with the U.S. Securities and Exchange Commission. "We now have the initiative and can decide how to move forward."

Ripple's Chief Legal Officer Stuart Alderoty stated on the X platform: "Today, Ripple is stronger than ever. This landmark case sets a precedent for the domestic cryptocurrency industry."

Although Ripple and the entire cryptocurrency industry view this as a significant victory, the decision by the U.S. Securities and Exchange Commission has not set a legal precedent, and the "regulatory guardrails" that the industry has been calling for have yet to be clearly defined.

The impact of the Ripple case on legislation and precedent

Cryptocurrency lobbying groups quickly welcomed the decision made by the U.S. Securities and Exchange Commission, which was announced by Garlinghouse at the New York Digital Assets Summit on March 19. The market also reacted accordingly—Ripple's price rose by 9% in the first hour after the announcement.

Supporters and observers are actively discussing on the X platform the precedent that this case will set for the cryptocurrency industry. However, legal observers are cautious about the overall impact of the U.S. Securities and Exchange Commission's appeal decision on the entire cryptocurrency industry.

Lawyer Aaron Brogan told Cointelegraph that the Ripple case "does not set a precedent that any other company can rely on." He added that while "there is no doubt that the current regulatory environment is more favorable for crypto firms," there will be no clarity on the SEC's specific policies until Paul Atkins is nominated as chair of the committee.

Metaplex's general counsel Brian Grace further pointed out that the 2023 ruling being appealed by the U.S. Securities and Exchange Commission does not constitute legal precedent.

He wrote on March 19: "The Ripple ruling does not have binding legal precedent. This is simply a ruling made by a district court judge based on the facts of the case."

The U.S. Securities and Exchange Commission's withdrawal of its appeal has limited impact on the ongoing legislative efforts to create a framework for the cryptocurrency industry in the U.S. Grace stated that the responsibility for creating lasting legal reforms for the cryptocurrency industry lies with Congress, not the U.S. Securities and Exchange Commission.

"The U.S. cryptocurrency industry needs new legislation to provide clarity and protection. Without this, plaintiff lawyers can continue to invoke the Howey test to file lawsuits in district courts across the country. Not even a friendly U.S. Securities and Exchange Commission can change this. We need a cryptocurrency market structure law," he said.

Brogan stated that he believes this decision will not have any direct impact on the legislative process, but the U.S. Securities and Exchange Commission can still address issues related to rulemaking.

"I believe many in Congress would welcome this, as the market structure legislation currently in the works seems to have stalled," he said.

Garlinghouse hopes to address legacy issues with the U.S. Securities and Exchange Commission.

The appeal decision by the U.S. Securities and Exchange Commission may put a "final exclamation point" on the question of whether XRP is a security, but the legal battle between Ripple and the SEC may continue.

In an interview with Bloomberg on March 19, Garlinghouse raised the possibility of filing a cross-appeal, which is an appeal by the respondent requesting a higher court to review the judgment of a lower court.

Specifically, Garlinghouse wants to revisit the ruling from 2023. In that ruling, Judge Analisa Torres determined that the tokens sold by Ripple did not constitute securities, but imposed a fine of $125,000 on Ripple, stating that these tokens should have been sold to institutional investors.

The company is also subject to a five-year funding ban for "bad actors," which Brogan stated could have a substantial impact on its operations.

"Currently, what we need to fight for is whether to fight for the recovery of that $125,000," Garlinghouse said.

He added that although the ruling on Ripple's securities is a "clear legal victory," there are "some parts that we believe can be improved. The question is, do we continue this fight, or can we reach an agreement with the SEC and walk away from everything?"

Outside of the courtroom, Congress is still working to advance the stablecoin bill. Bo Hines, Executive Director of the President's Advisory Council on Digital Assets, anticipates that the final version will be completed in a few months.

The cryptocurrency framework bill FIT 21 failed to pass the Senate in the 2024 legislative session, but some legislators are optimistic that the bill will pass in this session after "moderate modifications."

The cryptocurrency lobbying group, the Blockchain Association, expects these two bills to be passed before August, while Democratic Congressman Ro Khanna from California stated that these bills may be finalized by the end of the year.

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