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In every major litigation, there comes a moment when you realize it’s time to settle. A ruling doesn’t go your way, a juror gives your legal team the side eye, the judge makes it clear it’s time for a settlement conference. After Judge Analisa Torres’ decision in SEC v. Ripple, the time has come for the United States Securities and Exchange Commission to settle the remainder of its case against Ripple Labs — as well as its case against Coinbase.

The SEC’s attack on crypto has used a flexible legal definition of what constitutes a security that must register with the SEC under a legal test established by the Supreme Court in the 1946 case SEC v. Howey. Through most of its history, the SEC used this tool to go after outright frauds and scams with little economic reality behind them. You can understand why judges tended to give the SEC the benefit of the doubt and made the test increasingly flexible over a series of historical scam cases. Using this flexible test to attach legitimate crypto projects is different and, ultimately, leaves crypto projects with no way to register.

Torres ruled that sales to retail investors of the XRP (XRP) token were not necessarily linked to the entrepreneurial efforts of Ripple as a firm and, thus, failed one element of the Howey test. This is a unique crypto twist on the Howey test. Linking the investment to the entrepreneurial efforts of whoever is selling the interest is going to be harder in crypto because tokens don’t represent an equity interest in the issuer. Thus, the purchaser of a crypto token is not as closely linked to the efforts of the founder of a new blockchain as equity investors in traditional firms.

Related: The Supreme Court could stop the SEC’s war on crypto

This turns the SEC’s case against Coinbase on its head — and Coinbase knows it. It sent a strong message to the SEC when Coinbase relisted the XRP token within hours of Torres’ decision. This victory was only a partial victory, but it makes it very difficult for the SEC to target secondary markets in crypto securities like secondary trading on Coinbase’s platform.

All of this analysis doesn’t even begin to explore the challenges the SEC will face with the Supreme Court eager to reign in administrative agencies with the evolving major questions doctrine that could dramatically curtail the SEC’s war on crypto.

The SEC’s best move now is to settle and make a deal with Coinbase. Coinbase already extended the olive branch to the SEC a year ago by filing a request for rulemaking to create an adapted listing process for crypto assets. I suggested the same about six months earlier after a hearing of the SEC’s investor advisory committee — which I led. The committee found that crypto tokens could not feasibly register with the SEC without adaptation of the listing process.

There is no shortage of crypto lawyers ready to work with the SEC to figure out an adaptive regulatory regime for crypto tokens. There are hundreds of securities lawyers who are SEC alumni or big law alumni working in crypto right now who could help the SEC adapt their rules in the same way the SEC has adapted its rules in the past for asset-backed securities, master limited partnership, real estate investment trusts and dozens of other hybrid assets and asset vehicles.

Related: Demand is driving the price of Bitcoin to $130K

Many of the disclosure requirements in the SEC’s disclosure rules about boards of directors, executive compensation, shareholder proposals and financial statements simply don’t fit crypto projects. Who would “register” Ethereum today? It has no board and no CEO.

What assets and liabilities would be on the balance sheet of an entity filing documents about Ethereum, given that no entity actually controls the well-decentralized Ethereum blockchain? None of that is clear.

And things crypto asset buyers want to know, such as tokenomics or audits of blockchain security or the smart contracts underlying decentralized finance (DeFi) exchanges, aren’t mentioned in SEC disclosure rules.

The game of chicken that the SEC has been playing with Coinbase and Ripple needs to end because the SEC is about to get run off the road. There is a better path consistent with the rule of law. It’s time for the SEC to work with crypto lawyers to develop a workable crypto asset listing and disclosure regime and quit the blithe “just come in and register” talking points. This alternative approach will better protect crypto asset buyers.

J.W. Verret is an associate professor at George Mason University’s Antonin Scalia Law School. He is a practicing crypto forensic accountant and also practices securities law at Lawrence Law LLC. He is a member of the Financial Accounting Standards Board’s Advisory Council and a former member of the SEC Investor Advisory Committee. He also leads the Crypto Freedom Lab, a think tank fighting for policy change to preserve freedom and privacy for crypto developers and users.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Diane Abbott suspended from Labour Party

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Diane Abbott suspended from Labour Party

Diane Abbott has been suspended from the Labour Party pending an investigation.

A party spokesperson confirmed the decision to Sky News but did not give a reason why.

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It comes after the veteran MP defended previous comments about racism which sparked an antisemitism row and led to a year-long suspension.

She apologised at the time and was readmitted back into the party before the 2024 general election.

A Labour Party spokesperson said: “Diane Abbott has been administratively suspended from the Labour Party, pending an investigation. We cannot comment further while this investigation is ongoing.”

Sky News understands that the suspension is not related to the four rebels who lost the whip on Wednesday for “repeated breaches” of party discipline, including voting against the government’s welfare cuts.

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The action has been taken because of an interview in which she doubled down on her claim Jewish people experience racism differently to black people, which previously sparked a huge controversy.

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Diane Abbott

In a letter to The Observer in 2023, Ms Abbott argued that people of colour experienced racism “all their lives” and said that was different to the “prejudice” experienced by Jewish people, Irish people and Travellers.

Shortly after it was published, she issued a statement in which she said she wished to “wholly and unreservedly withdraw my remarks and disassociate myself from them”.

However in a new interview with BBC Radio 4’s Reflections programme this week, she said she did not look back on the incident with regret.

Ms Abbott said: “Clearly, there must be a difference between racism which is about colour and other types of racism because you can see a Traveller or a Jewish person walking down the street, you don’t know.

“But if you see a black person walking down the street, you see straight away that they’re black. They are different types of racism.”

She added: “I just think that it’s silly to try and claim that racism which is about skin colour is the same as other types of racism.

“I don’t know why people would say that.”

Commenting on the suspension, Ms Abbott told Sky News: “It’s obvious this Labour leadership wants me out. My comments in the interview with James Naughtie were factually correct, as any fair-minded person would accept.”

The clip of the interview was re-posted by Brian Leishman, one of the MPs suspended on Wednesday, who said: “Diane Abbott has fought against racism her entire life.”

Bell Riberio-Addy, who lost her role as trade envoy in yesterday’s purge, also came to Ms Abbott’s defence, saying: “Before condemning her based on headlines, I would listen to her clip and note she discussed the different forms that racism takes and condemned all forms of racism.”

Former shadow chancellor John McDonnell made similar comments, saying that in the interview his colleague “forthrightly condemns antisemitism & discusses the different forms of racism”.

But Labour MP David Taylor told Sky News he has “long thought Diane Abbott shouldn’t be a member of our party due to her appalling positions on everything from Bosnia to Syria”.

He added: “As the Jewish Labour Movement have said, antisemitism targets Jews regardless of how they look, and many in the community are visibly Jewish and suffer racism for it.”

In the interview, Ms Abbott said she “of course” condemns antisemitic behaviour in the same way she would condemn racist behaviour because of the colour of someone’s skin, adding: “I do get a bit weary of people trying to pin the antisemitic label on me because I spent a lifetime facing racism of all kinds.”

Ms Abbott made history when she was elected as Britain’s first black female MP for Labour in 1987.

She is the longest-serving female MP in the Commons, giving her the title “Mother of the House”.

As an MP on the left of the party she has often clashed with the leadership throughout her career – bar her time serving in Jeremy Corbyn’s shadow cabinet.

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Sixteen and 17-year-olds will be able to vote in next general election
Five reasons to be confused by Starmer’s MP suspensions

Many MPs rallied in support of Ms Abbott last year when it was not clear if she would be reinstated in time for the general election, or allowed to stand.

She went on to retain her seat of Hackney North and Stoke Newington with a majority of over 15,000.

Deputy Prime Minister Angela Rayner hinted action could be taken against Ms Abbott when she told The Guardian earlier on Thursday that she was “disappointed” in her colleague’s remarks.

“There’s no place for antisemitism in the Labour Party, and obviously the Labour Party has processes for that,” she said.

A source close to the decision to suspend her told Sky News there is a “very slim chance” she will be allowed back in, given she did antisemitism training and apologised last time.

It raises questions about whether Ms Abbott could join the new party being formed by Mr Corbyn and former Labour MP Zarah Sultana.

For the time being, Ms Abbott will sit in the Commons as an independent MP.

Adnan Hussain, who was elected as the independent MP for Blackburn last year, said on X: “We’d be honoured to have a giant like Diane join us, she [should] come to the side that would really appreciate her for the legend she is.”

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SEC Chair Atkins considers innovation exemption to boost tokenization

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SEC Chair Atkins considers innovation exemption to boost tokenization

SEC Chair Atkins considers innovation exemption to boost tokenization

Crypto industry hails GENIUS Act as a win, while Senator Elizabeth Warren criticizes it for consumer protection gaps.

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Former rugby player sentenced for $900K crypto mining Ponzi

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Former rugby player sentenced for 0K crypto mining Ponzi

Former rugby player sentenced for 0K crypto mining Ponzi

Former rugby player Shane Donovan Moore was sentenced to 2.5 years in US federal prison for running a $900,000 crypto mining Ponzi scheme.

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