The biggest digital currency trade in the US, Coinbase, has asked a government court for consent to mediate as an amicus curiae in the proceeding with debate between Ripple Labs and the Securities and Exchange Commission (SEC).
Coinbase joins a growing list of backers. Blockchain Association, a crypto advocacy group, SpendTheBits, a nonprofit organisation, and Investor Choice Advocates Network (ICAN) have already shown their support by filing an amicus brief.
In its brief to Judge Analisa Torres, Coinbase accuses the SEC of falling behind the rapidly developing cryptocurrency market. Additionally, according to Coinbase, the regulator has not succeeded in developing a regulatory framework.
As an alternative, the SEC enforces its laws through ad hoc enforcement proceedings, in which it retrospectively declares that digital assets that have already been exchanged are securities and are as a result governed by SEC rules.
According to the SEC’s brief, their opponents have already admitted that they can’t pass the Howey test. Although inventive, the defendants’ test is not based on any legal principles. Additionally, Ripple is relying on expert testimony from its own professionals, who are, however, disqualified due to their worries.
Ripple Vs. The SEC:
The SEC filed a lawsuit against Ripple in December 2020, alleging that it sold unregistered securities and that XRP is a security rather than a commodity. The blockchain startup allegedly illegally raised $1.8 billion by selling the token, according to the SEC.
One of the biggest disputes between a cryptocurrency corporation and the regulatory bodies ended up occurring in this case. It was challenging to ascertain who held the advantage in the lawsuit even after a year of court hearings and motion filings.