By Lucas Williams
The recent lawsuit filed by the U.S Securities and Exchange Commission became a test case for the authorities. The court hearing attracts the attention of the whole world. Recently crypto policymakers and crypto scholars voiced on the matter. In their opinion scholars said that the recent lawsuit filed by the SEC against fintech startup ripple showed the malign intentions about “imposing regulations by force.”
They further said that the urgency by SEC was all about cornering the U.S congress, as SEC was not interested in seeking congress guidelines to clarify the SEC’s authority in the statute. It took SEC 7 years to determine that Ripple’s XRP payment method and distributed ledger are security but not a currency. The decision was so abrupt that many exchanges delisted XRP. This has cost Ripple billions of dollars. The decision made by SEC was so abrupt that it raises questions, and many do believe that SEC surpassed their powers to implement that decision and this decision is made out of rage.
However, the ongoing preceding are in the favor of Ripple and the decision is likely to be revert by the court. The scholars said this is the first time that any regulatory authorities have crossed its domain and misused its power, causing extensive harm to markets, innovators, and consumers. People including some veteran law experts suggested that SEC itself needs clear and transparent guidelines to regulate the cryptocurrency. Experts say that this lawsuit indicates two outcomes. First, SEC itself is confused and obsessed when it comes to dealing with cryptocurrency whether the digital tokens are commodities or security. The second outcome indicates that SEC is biased towards regulating cryptocurrency and trying to enforce the law with sheer force.
However, both outcomes seem to be going against SEC in its court battle against Ripple. SEC is likely to lose the battle. John Berlau of the Competitive Enterprise Institute said that there should be a minimum of two requirements to judge whether a digital asset is a security or not:
(a) An exclusive promise of ownership or chunk in the firm’s revenue or profits, and (b) a promise of return in investment.
On the other, if investors only own crypto coins for trading this is not secured by any means and law. SEC has no control or authority over the trade of digital assets. It is a basic right of people that they can invest in any market they feel ok. The recent lawsuit against Ripple is nothing but the pursuit of SEC for a limitless power grab. Scholars do believe that SEC’s recent move against Ripple can give birth to many complications regarding the law enforcement initiative taken by some other nonbiased institutions. The feud that started between law enforcement agencies and the crypto world two weeks ago seems to be getting more and more intense.