Binance’s Case Law May Help XRP In The SEC Versus Ripple Lawsuit

The US Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs inches closer to a conclusion. 

While XRP itself is not a security according to a court decision in July 2023, the outcome of Ripple’s $2 billion settlement that the SEC is asking of them could be influenced by a similar case involving Binance.

Context

In 2022, a lawsuit (JD Anderson versus Binance) was filed by a group of investors who had purchased cryptocurrencies on the exchange in 2017. These investors alleged that Binance acted as an unregistered securities dealer by offering and selling investment contracts (security tokens) in the US without proper risk disclosure or registration.

Binance, on the other hand, defended itself by arguing that US laws could not be applied to its international operations pointing out its lack of physical presence in the US, and argued that the investors’ lawsuit overstepped legal boundaries.

Eventually, the court sided with Binance and agreed that the lawsuit tried to impose US regulations on an overseas company in an inappropriate way. Additionally, the judge ruled that the plaintiffs had waited too long to file their lawsuit.

Binance previously offered services to US users. However, regulatory pressures from the securities regulator and other agencies led to its exit from the US market.

Crypto Attorneys Point Out

In November 2023, legal expert Jeremy Hogan suggested on Twitter/X that the outcome of the JD Anderson vs. Binance case could set a precedent limiting the reach of US securities laws outside the United States.

In addition, the outcome has significant implications, potentially impacting the sovereignty of foreign nations over their own securities regulations.

Attorney John Deaton also disputed the SEC’s $770 million disgorgement request at the time and questioned the SEC for seeking disgorgement related to XRP sales in the UK, Japan, Switzerland, and other countries.

Final Thoughts

Ripple’s nearing 4-year legal struggle with the securities regulator has been a major talking point in the crypto industry. The SEC’s lawsuit, alleging that Ripple conducted an unregistered securities offering, has cast a long shadow over the XRP token. But with the case nearing its end, many investors are cautiously optimistic for a favorable resolution.

Via: 2Usethebitcoin.com

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