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Ripple Case ‘Inevitably’ Goes To Second Circuit: Ex-SEC Expert

During MicroStrategy’s Bitcoin For Corporations event, Neel Maitra, a partner at Dechert and former fintech and crypto specialist at the SEC, delved into the complex legal issues surrounding crypto regulations, focusing on the ongoing Ripple litigation. With his background in regulatory bodies and private legal practice, Maitra provided valuable insights on the matter.

The main question at the center of the Ripple case is whether transactions on cryptocurrency exchanges should be classified as securities under US law. Judge Analisa Torres, overseeing the case, made a distinction between primary and secondary transactions. While primary transactions are clearly considered securities, she argued that secondary transactions, occurring anonymously on exchanges, may not automatically qualify as such.

On the other hand, Judges Jed Rakoff and Katherine Polk Failla took a broader view, suggesting that marketing strategies by crypto companies could influence both primary and secondary market transactions, potentially categorizing even secondary transactions as securities.

Maitra highlighted the differing opinions among judges, showcasing the complexity and evolving nature of cryptocurrency regulation. He predicted that the Ripple vs SEC case will likely move to the second circuit and beyond, emphasizing the ongoing debate and progression through higher judicial levels.

Despite setbacks in some rulings, Maitra explained that the SEC does not see the Ripple case as a failure of its stance on cryptocurrencies as securities. Instead, the SEC is preparing to refine its arguments and evidence for further judicial reviews.

This ongoing litigation not only impacts Ripple and other firms but also sets crucial precedents that could shape the regulatory landscape for the entire cryptocurrency market in the US. At the time of writing, XRP was trading at $0.54259.

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