By Richard Hines
The regulation against Ripple Organization over its XRP tokens has eaten deep into exchanges, leading investors to suffer massive losses. According to a Coinbase analysis, retail traders have lost over $15 billion.
Coinbase Voices Out Grievances Over These Regulations
According to a Coinbase statement, the compelled move of all US-based exchanges to delist XRP tokens has had a significant impact on investors, as the overall market cap of XRP tokens has fallen.
In the wake of this event, the crypto exchange Coinbase submitted an amicus brief regarding this matter. An amicus brief is a legal brief submitted to a court by a third party who is not directly involved in the issue but has ties to it and may be affected by the court’s decision. Coinbase filed an amicus brief in support of Ripple, claiming that many retail traders lost over $15 billion owing to the SEC’s precision in regulating this token.
According to Coinbase, the SEC’s action led US-based exchanges to delist the XRP coin, resulting in a significant drop in the coin’s market cap. Crypto investors and companies were aware that these regulations were in place to manage the crypto space, but the SEC’s engagement has been one of harsh rules and individual enforcement, which has been deemed unjust.
This regulation was classified as surprise enforcement and intense enforcement scrutiny on Ripple, while other similar firms have been excluded. The crypto businesses argued that the SEC’s requirements for crypto-related firms were contrary to how the firms are generally conducted.
These SEC regulations required brokers to act as middlemen in cryptocurrency transactions, reducing profit. When using a crypto exchange for trading, just a modest fee is accounted for, but adding a brokers’ commission cuts down profit, which does not benefit customers.
According to Paul Grewal, Chief Legal Officer of Coinbase, suing XRP sellers without justification while those trading operations were legal demonstrates that the SEC has blinded themselves to the guiding principle.
Crypto Communities Join Forces With Ripple Against SEC
Many crypto communities have also joined forces together with Coinbase in favor of Ripple, claiming that this regulation is insignificant.
The Blockchain group has submitted an amicus brief arguing that the SEC’s regulations on XRP may have a negative impact on the crypto industry.
The lawyer presiding over the XRP case has also filed a brief urging the court to reject the SEC’s claims regarding XRP tokens. Other firms, such as Venture capital and Crypto capital, have also filed amicus briefs with the court.