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Ripple celebrates SEC’s dropped appeal, but crypto rules still not set

Ripple is celebrating the United States Securities and Exchange Commission’s (SEC) decision not to pursue a court case against the firm, but it provides little legal certainty for the crypto industry. 

The US financial regulator has apparently dropped an appeal against Ripple, the issuing firm of crypto asset XRP. The industry saw the case as a prime example of regulatory overreach by the SEC under former chair Gary Gensler.

Ripple CEO Brad Garlinghouse said the decision “provides a lot of certainty for RIpple” and that while the case is effectively over, there are still some loose ends the firm needs to tie up with the SEC. “We now are in the driver’s seat to determine how we want to proceed.”

Stuart Alderoty, Ripple’s chief legal officer, wrote on X, “Today, Ripple moves forward — stronger than ever. This landmark case set a precedent for the domestic crypto industry.”

Ripple and the crypto industry as a whole are counting this as a major victory, but the SEC’s decision provides no legal precedent, and the “guardrails” the industry has lobbied for are yet to be defined. 

Ripple celebrates SEC’s dropped appeal, but crypto rules still not set

Consequences of Ripple case on lawmaking and precedent

The cryptocurrency lobby was quick to celebrate the SEC decision, announced by Garlinghouse at the Digital Asset Summit in New York on March 19. Markets took notice — XRP price spiked 9% in the first hour following the announcement.

Supporters and observers posted on X about the precedent the case would set for the crypto industry. But legal observers are less certain about the overall impact the SEC’s appeal decision will have on the broader crypto industry.

Lawyer Aaron Brogan told Cointelegraph that the Ripple case “creates no precedent that any other firm can rely on.” He added there is “no question that the regulatory environment is more favorable to crypto firms today,” but the SEC’s exact policy won’t become clear until Paul Atkins is nominated as chair of the commission.

Related: Crypto regulation must go through Congress for lasting change — Wiley Nickel

Brian Grace, general counsel at the Metaplex Decentralized Autonomous Organization, further noted that the 2023 decision to which the SEC was appealing does not set a legal precedent.

He wrote on March 19, “The Ripple decision is not binding legal precedent. It was a single district court judge’s ruling based on the facts of that case.” 

Ripple celebrates SEC’s dropped appeal, but crypto rules still not set

The SEC appeal repeal also has limited influence on the ongoing legislative efforts to create a framework for the cryptocurrency industry in the US. Grace said that the onus is on Congress, not the SEC, to make lasting legal changes for the cryptocurrency industry. 

“The U.S. crypto industry needs new legislation to provide clarity and protection. Without it, the Plaintiffs bar can continue to sue in district courts across the country relying on Howey. A friendly SEC also does not change this. We need a crypto market structure law,” he said

Brogan said that he didn’t think the decision would have any direct effect on the lawmaking process, but the SEC could still solve questions regarding rulemaking.

“I think many in Congress would welcome that as the market structure legislation currently percolating appears dead in the water,” he said.

Garlinghouse wants to tie up loose ends with SEC

The SEC appeal decision may put the “final exclamation point” on whether XRP is a security, but the legal battle between Ripple and the SEC could be set to rage on.

In a March 19 Bloomberg interview, Garlinghouse brought up the possibility of going on the offensive with a cross-appeal, i.e. an appeal from an appellee requesting that a higher court review a lower court’s decision. 

Related: Bitnomial drops SEC lawsuit ahead of XRP futures launch in the US

Namely, Garlinghouse wants to revisit the 2023 decision in which Judge Analisa Torres, while ruling Ripple’s publicly sold tokens did not constitute a security, levied a $125 million fine on Ripple, stating that the tokens should have been sold to institutional investors. 

The firm is also subject to a five-year “bad actor” prohibition on fundraising which, says Brogan, could meaningfully impact its operations. 

“At this point, all we’re fighting for is do we want to fight to get the $125 million back,” said Garlinghouse.

He added that while the XRP-securities decision was a “clear legal victory,” there are “pieces of it that we think could be kind of cleaned up. And the question is, do we want to fight that fight? Or can we come to an agreement with the SEC to drop everything?”

Outside of the courtroom, Congress is still working to make meaningful progress on the stablecoin bill. Bo Hines, the executive director of the President’s Council of Advisers on Digital Assets, expects the final version to be ready in a couple of months. 

The crypto framework bill FIT 21 failed to make it through the Senate in the 2024 legislative session, but some lawmakers are optimistic that it will make it through this session with “modest changes.”

The Blockchain Association, a crypto lobby group, expects both laws to pass by August, while US Representative Ro Khanna, a Democrat from California, says they could be finalized by year’s end. 

Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge

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US appeals time served sentences for HashFlare Ponzi schemers

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US appeals time served sentences for HashFlare Ponzi schemers

US appeals time served sentences for HashFlare Ponzi schemers

Prosecutors appealed the sentences given to HashFlare founders Sergei Potapenko and Ivan Turõgin, after arguing the pair should get 10 years in prison.

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Nigel Farage has a new ‘leave’ campaign – here’s how it could work and how it might impact you

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Nigel Farage has a new 'leave' campaign - here's how it could work and how it might impact you

Nigel Farage has said he would take the UK out of the European Convention on Human Rights (ECHR) if Reform win the next election.

The party’s leader also reaffirmed his pledge to repeal the Human Rights Act and disapply three other international treaties acting as “roadblocks” to deporting anyone entering the UK illegally.

In a speech about tackling illegal migration, he said a Reform government would detain and deport any migrants arriving illegally, including women and children, and they would “never, ever be allowed to stay”.

Sky News looks at what the ECHR is, how the UK could leave, and what could happen to human rights protections if it does.

What is the ECHR?

On 4 November 1950, the 12 member states of the newly formed Council of Europe (different to the EU) signed the Convention for the Protection of Human Rights and Fundamental Freedoms – otherwise known as the ECHR.

It came into force on 3 September 1953 and has since been signed by an additional 34 Council of Europe members who have joined, bringing the total to 46 signatories.

The treaty was drafted in the aftermath of the Second World War and the Holocaust to protect people from the most serious human rights violations. It was also in response to the growth of Stalinism in central and Eastern Europe to protect members from communist subversion.

The treaty was the first time fundamental human rights were guaranteed in law.

Sir Winston Churchill helped establish the Council of Europe and was a driving force behind the ECHR, which came from the Charter of Human Rights that he championed and was drafted by British lawyers.

Sir Winston Churchill was a driving force behind the ECHR
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Sir Winston Churchill was a driving force behind the ECHR

To be a signatory of the ECHR, a state has to be a member of the Council of Europe – and they must “respect pluralist democracy, the rule of law and human rights”.

There are 18 sections, including the most well-known: Article 1 (the right to life), Article 3 (prohibition of torture), Article 6 (right to a fair trial), Article 8 (right to private and family life) and Article 10 (right to freedom of expression).

The ECHR has been used to halt the deportation of migrants in 13 out of 29 UK cases since 1980.

ECHR protections are enforced in the UK through the Human Rights Act 1998, which incorporates most ECHR rights into domestic law. This means individuals can bring cases to UK courts to argue their ECHR rights have been violated, instead of having to take their case to the European Court of Human Rights.

Article 8 is the main section that has been used to stop illegal migrant deportations, but Article 3 has also been successfully used.

Read more:
Why Farage’s small boats plan is not actually about policy
Legal expert explains if Farage deportation plan would work

The ECHR is interpreted by judges at this court in Strasbourg, France. File pic: AP
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The ECHR is interpreted by judges at this court in Strasbourg, France. File pic: AP

How is it actually used?

The ECHR is interpreted by the European Court of Human Rights (ECtHR) – you’ll have to bear with us on the confusingly similar acronyms.

The convention is interpreted under the “living instrument doctrine”, meaning it must be considered in the light of present-day conditions.

The number of full-time judges corresponds to the number of ECHR signatories, so there are currently 46 – each nominated by their state for a non-renewable nine-year term. But they are prohibited from having any institutional ties with the state they come from.

An individual, group of individuals, or one or more of the signatory states can lodge an application alleging one of the signatory states has breached their human rights. Anyone who have exhausted their human rights case in UK courts can apply to the ECtHR to have their case heard in Strasbourg.

All ECtHR hearings must be heard in public, unless there are exceptional circumstances to be heard in private, which happens most of the time following written pleadings.

The court may award damages, typically no more than £1,000 plus legal costs, but it lacks enforcement powers, so some states have ignored verdicts and continued practices judged to be human rights violations.

Read more: Asylum seekers in charts and numbers

Inside the European Court of Human Rights. File pic: AP
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Inside the European Court of Human Rights. File pic: AP

How could the UK leave?

A country can leave the convention by formally denouncing it, but it would likely have to also leave the Council of Europe as the two are dependent on each other.

At the international level, a state must formally notify the Council of Europe of its intention to withdraw with six months’ notice, when the UK would still have to implement any ECtHR rulings and abide by ECHR laws.

The UK government would have to seek parliament’s approval before notifying the ECtHR, and would have to repeal the Human Rights Act 1998 – which would also require parliamentary approval.

Would the UK leaving breach any other agreements?

Leaving the ECHR would breach the 1998 Good Friday Agreement, a deal between the British and Irish governments on how Northern Ireland should be governed, which could threaten the peace settlement.

It would also put the UK’s relationship with the EU under pressure as the Brexit deal commits both to the ECHR.

The EU has said if the UK leaves the ECHR it would terminate part of the agreement, halting the extradition of criminal suspects from the EU to face trial in the UK.

Keir Starmer has previously ruled out taking Britain out of the ECHR
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Keir Starmer has previously ruled out taking Britain out of the ECHR

How would the UK’s human rights protections change?

Certain rights under the ECHR are also recognised in British common law, but the ECHR has a more extensive protection of human rights.

For example, it was the ECHR that offered redress to victims of the Hillsborough disaster and the victims of “black cab rapist” John Worboys after state investigations failed.

Before cases were taken to the ECtHR and the Human Rights Act came into force, the common law did not prevent teachers from hitting children or protect gay people from being banned from serving in the armed forces.

Repealing the ECHR would also mean people in the UK would no longer be able to take their case to the ECtHR if the UK courts do not remedy a violation of their rights.

The UK’s human rights record would then not be subject to the same scrutiny as it is under the ECHR, where states review each other’s actions.

Two victims of John Worboys sued the Met Police for failing to effectively investigate his crimes using Article 3 of the ECHR. Pic: PA
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Two victims of John Worboys sued the Met Police for failing to effectively investigate his crimes using Article 3 of the ECHR. Pic: PA

How human rights in the UK would be impacted depends partly on what would replace the Human Rights Act.

Mr Farage has said he would introduce a British Bill of Rights, which would apply only to UK citizens and lawful British citizens.

He has said it would not mention “human rights” but would include “the freedom to do everything, unless there’s a law that says you can’t” – which is how common law works.

Legal commentator Joshua Rozenberg said this would simply confirm the rights to which people are already entitled, but would also remove rights enjoyed by people visiting the UK.

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1 in 4 UK adults open to investing in crypto for retirement: Survey

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1 in 4 UK adults open to investing in crypto for retirement: Survey

1 in 4 UK adults open to investing in crypto for retirement: Survey

Over a quarter of Brits said they’d add crypto to their retirement portfolios, while 23% would even withdraw existing pension funds to invest in the space.

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