Legal action between Ripple and the US Securities and Exchange Commission (SEC) over XRP has seen an interesting turn, as a former SEC executive predicts an advantageous result for Ripple. John Reed Stark led SEC’s Office of Internet Enforcement before leaving to form his own law practice and shared his insight about impending favorable resolution due to an SEC shift towards cryptocurrency enforcement.
Turning Tide in the XRP Legal Dispute
Stark noted a remarkable shift in the SEC’s litigation strategy towards leading crypto firms, including their temporary halt on Coinbase litigation. He suggested this reflects an overall review of regulatory tactics concerning digital assets by the SEC that may result in ceasing to appeal the Ripple case and prioritizing enforcement victories instead.
Stark anticipates that this relaxed stance may also extend to XRP lawsuit, since its sale to retail investors did not qualify as securities transactions in July 2023, thus weakening SEC’s position.
He expects the SEC will halt or withdraw its crypto-related appeals against Ripple as part of their regulatory strategy reassessment, potentially scaling back their aggressive enforcement approach and potentially decreasing litigations against crypto entities. This anticipated shift follows internal restructuring within the agency; moving from aggressive enforcement toward more appropriate litigation strategies against these entities.
Strategic Reassessment of SEC’s Crypto Enforcement
Stark points to SEC’s recent transformation as evidence of strategic redirection. He notes its rebranding from Crypto Assets and Cyber Unit to Cyber and Emerging Technologies Unit, along with reallocating resources away from litigation-heavy approaches towards more measured approaches for crypto enforcement.
He foresees an overall reduction of SEC enforcement activities against the cryptocurrency sector, such as suspending ongoing investigations, settling active lawsuits on terms favorable to defendants and abandoning legal appeals. Stark suggests this recalibration renders previous regulatory precedents regarding digital assets temporarily irrelevant.
Stark concluded his remarks by analogizing the SEC’s crypto enforcement efforts as historical cessation. By this point in the discussion, XRP stood at $2.60, reflecting market reaction to these developments.
