Last Friday, the Blockchain Association wanted to support Ripple in the lawsuit that pits the company that issued the XRP token against the SEC (Securities and Exchange Commission), the American financial policeman. For the crypto market, the stakes are high.
A crucial lawsuit for the crypto industry!
It was through social media that the Blockchain Association announced its support for Ripple in its lawsuit against the SEC. Via un thread de 8 tweets, the entity clarified last Friday that it was getting behind the Ripple company in order to protect the crypto industry. Here is the first of those 8 tweets:
1/ Today we announced we filed an amicus brief supporting a correct interpretation of Howey in the SEC’s two-year legal battle against @Ripple.
A judge now has the opportunity to issue a substantive opinion on how Howey applies to digital assets.
Here’s what’s at stake🧵🧵🧵
— Blockchain Association (@BlockchainAssn) October 28, 2022
To argue its position, the Blockchain Association also evokes the famous howey’s law. And according to the principles of this law, Ripple could not be considered differently from Bitcoin or Ethereumtwo digital assets that the SEC has recognized as decentralized enough not to recognize them as financial securities.
The executive director of the Blockchain Association believes that the lawsuit could have significant consequences for the crypto market. On this subject, she describes the interpretations of the SEC on securities as “biggest threat to the future of a growing crypto industry“. Kristin Smith adds:
By erratically applying these outdated standards to modern and innovative technology, the SEC continues its “regulation by fear” scheme, punishing crypto companies with little justification or warning.
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The Blockchain Association calls for more clarity!
If the question of the threat to the crypto industry is raised, it remains complementary to the establishment of a clearer framework. In any case, this is the opinion defended by the Blockchain Association in its long Twitter thread. Indeed, the entity calls on the legislator to adopt a clearer regulatory framework for the supervision of digital assets.
No regulatory agency should unilaterally regulate crypto with outdated standards. Instead, it’s time for Congress to set out a clear regulatory framework to guide the industry.
The Blockchain Association also highlights the risk of a reversal of jurisprudence. Indeed, it considers that in the event of an unfavorable outcome for Ripple, the jurisdiction of the SEC could expand, well beyond what was provided for by the Howey test.
Good to know : The Howey test is used to classify assets. If the asset in question is classified as an investment contract, it will be subject to applicable securities laws. The test considers that an investment contract is established when there is “an investment of money in a common enterprise with a reasonable expectation of benefits to be derived from the efforts of others”.
2023: The XRP year?
For the past few weeks, the XRP token has been fueling all fantasies. While investing in digital assets is a gamble to some, investing in XRP might feel like a gamble within a gamble. Obviously, the outcome of the lawsuit with the SEC will be the ultimate judge of the price to come around the XRP token.
Some predict that in the event of a win, the XRP token could quickly soar above the dollar. As of this writing, the XRP token is trading at $0.4625. If some prediction algorithms like WalletInvestor are to be believed, XRP might take a while to regain the highs. Indeed, according to the platform’s statistical models, the token would barely exceed the dollar bar by 2027. A cautious observation also shared by DigitalCoinPrice, which expects 2025 to return above this symbolic level.