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<p>The post <a rel="nofollow" href="https://coinpedia.org/news/ripple-vs-sec-lawsuit-ftcs-shields-secs-missteps/">SEC’s XRP Case: Overreach, Hypocrisy, and a $15 Billion Disaster</a> appeared first on <a rel="nofollow" href="https://coinpedia.org">Coinpedia Fintech News</a></p> 
<p>In a massive move for the crypto space, <a href="https://coinpedia.org/news/crypto-twitter-speculates-will-judge-torres-deny-secs-motion-in-ripple-lawsuit/">Judge Analisa Torres</a> had previously rejected the U.S. Securities and Exchange Commission’s (SEC) claim that Ripple’s XRP token was a security. </p> 
<p>The SEC’s aggressive approach hurt innocent XRP holders and showcased the agency’s troubling inconsistency in regulating the crypto sector. This landmark case between the <a href="https://coinpedia.org/news/xrp-lawsuit-ripple-clo-takes-aim-at-gensler-in-sec-showdown/">SEC</a> and Ripple not only reveals the limitations and overreaches of the SEC but also brings into sharp focus the protections offered to federal agencies by the Federal Tort Claims Act (FTCA).</p> 
<h2 class="wp-block-heading" id="a-look-at-the-sec-lawsuit">A Look at the SEC Lawsuit</h2> 
<p>It all began in late 2020 when the SEC filed a lawsuit against Ripple Labs, Inc., and its top executives, Brad Garlinghouse and Chris Larsen, alleging that XRP is a “security.” The case, often dubbed “the cryptocurrency case of the century,” sought billions from Ripple and its founders, setting the stage for a showdown that ultimately cost the defendants $100 million.</p> 
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   <p lang="en" dir="ltr">"In short, the <a href="https://twitter.com/SECGov?ref_src=twsrc%5Etfw">@SECGov</a> central argument (against <a href="https://twitter.com/Ripple?ref_src=twsrc%5Etfw">@Ripple</a>) failed almost completely under judicial scrutiny. It did not just hurt defendants. The SEC harmed a lot of innocent people in the process."<a href="https://t.co/ZlV0FKn76v">https://t.co/ZlV0FKn76v</a></p>— CryptoLaw (@CryptoLawUS) <a href="https://twitter.com/CryptoLawUS/status/1707422826221691366?ref_src=twsrc%5Etfw">September 28, 2023</a>
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<p>However, on July 13, 2023, Judge Torres destroyed the SEC’s central argument, asserting that most XRP sales did not fit the definition of securities. The SEC’s expansive interpretation, aimed at categorizing a digital asset as a security, had immediate financial consequences, resulting in the erosion of over $15 billion in wealth for XRP holders in the secondary market.</p> 
<p>Also Read: <a href="https://coinpedia.org/news/ripple-lawsuit-news-xrp-lawyer-mocks-secs-attempt-to-appeal-saying-theyre-running-out-of-options/">Ripple Lawsuit News : XRP Lawyer Mocks SEC’s Attempt to Appeal, Saying They’re Running Out of Options</a></p> 
<h2 class="wp-block-heading" id="h-sec-s-double-standards">SEC’s <strong>Double Standards</strong></h2> 
<p>While the SEC took a public stance suggesting assets like XRP were not securities, internal documents revealed otherwise. Ripple’s defense team unearthed documents showcasing that the SEC had intentionally misled the public for years about its position on cryptocurrencies. When <a href="https://coinpedia.org/price-prediction/xrp-ripple-price-prediction/">XRP</a> faced severe scrutiny, ethereum got a free pass.&nbsp;</p> 
<p>During the discovery phase of the trial, the SEC vigorously fought to keep this evidence hidden from public view. The agency’s efforts to conceal the truth were so troubling that Magistrate Judge Sarah Netburn reprimanded the SEC, condemning its “hypocrisy” and disregard for legal integrity.</p> 
<h2 class="wp-block-heading" id="yet-the-crackdowns-don-t-stop">Yet, the Crackdowns Don’t Stop</h2> 
<p>Ripple wasn’t the only one in the SEC’s crosshairs. The regulator also went after crypto giants Binance and Coinbase, leveraging the same dubious legal theory that digital assets are securities. This move suggested a broader agenda, hinting that the SEC aims to dismantle the entire crypto industry—a sentiment echoed by SEC Chairman <a href="https://coinpedia.org/news/sec-chair-gary-gensler-says-vast-majority-of-crypto-tokens-meet-the-investment-contract-test/">Gary Gensler</a>‘s dismissive comments about digital currencies.</p> 
<p>Read More: <a href="https://coinpedia.org/news/crypto-community-on-edge-coinbase-ceo-predicts-legal-battle-at-supreme-court/">“The SEC Can’t Continue to Punish Crypto”: Coinbase CEO Slams Gary Gensler</a></p> 
<h2 class="wp-block-heading" id="change-is-needed-fast">Change is Needed… Fast</h2> 
<p>While the Ripple case reveals alarming overreach and shady behaviour by the SEC, the current legal framework shields the agency from any consequences. The FTCA believes that “<a href="https://www.realclearpolicy.com/articles/2023/09/28/the_sec_is_not_the_king_982634.html">the king can do no wrong</a>,” leaving malicious acts by federal regulators unpunished.</p>

SEC’s XRP Case: Overreach, Hypocrisy, and a $15 Billion Disaster

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