Ripple finds new ally in its fight against SEC as Coinbase files lawsuit against the regulatory body
|- Ripple noted a 34% growth in its DEX volumes and a 46% increase in the centralized exchanges' activity.
- Coinbase, on April 27, responded to the SEC's Wells notice stating they are willing to defend themselves.
- The Ripple community saw this as a potential tool for victory but, at the same time, demanded relisting of XRP on the exchange.
Ripple has been fighting the Securities and Exchange Commission (SEC) for almost two and half years now, and in all this time, it took on the regulatory body all by itself. However, the SEC's regulation by enforcement method seems to have backfired and tipped the scales in favor of Ripple with the help of Coinbase.
Ripple grows amid regulatory uncertainty
Ripple has been growing undeterred despite the regulatory uncertainty it faces in the courtroom. As per the Q1 2023 report, over the quarter, XRP Ledger on-chain activity, particularly the decentralized exchange (DEX) volumes, noted a 34% increase in comparison to Q4 2022 to $115 million.
Additionally, the XRP Average Daily Volume on centralized exchanges shot up 46% to $1 billion from the previous quarter's $698 million.
A chunk of the credit for the strong quarter has been accredited to DEXes and NFTs, as the 1 million assets have been minted on the Ledger since the XLS-20 proposal went live. The proposal was a key upgrade to the network as it enables the creation of NFTs on XRP Ledger without the use of smart contracts.
However, amid the lack of clarity regarding regulation in the United States, Ripple might have its eyes set on other countries. In regards to the same, the Chief Executive Officer (CEO) of Ripple, Brad Garlinghouse, stated,
"The US may be moving backwards, but I like to focus on the positive – in the last few months the EU, UK and UAE all moved forward with new regulatory frameworks and regimes for crypto activities.
This is the second time Ripple has made such a suggestion as earlier this week, even the International Policy Counsel at Ripple, Susan Friedman, hinted towards the same.
Read more about it here - XRP price crash to be offset by Ripple making growth in the European Market
But at the core of this entire discourse is the lawsuit faced by Ripple that SEC initiated in 2020. As the world awaits the summary judgment by Judge Torres, Ripple is dealing with another lawsuit filed against it. This lawsuit was filed by XRP holders who alleged that illegal offering by Ripple led to losses to the investors.
All of this might smooth down in the coming weeks.
Enter Coinbase!
After discussions about Coinbase moving offshore and being targeted by the SEC with a Wells notice, the crypto exchange finally responded. On April 27, Coinbase stated that the company first went public in 2020 following the blessing of the regulatory body; however, it is now facing potential charges on the very same aspects, per the Wells notice.
Paul Grewal, the Chief Legal Officer at Coinbase in regards to the same tweeted,
While the SEC claims the rules are clear, they clearly are not. The CFTC and SEC have issued conflicting views; Courts have questioned the SEC's lack of guidance; and the SEC itself, just last week, couldn't answer basic questions before Congress. 3/7
— paulgrewal.eth (@iampaulgrewal) April 27, 2023
While the SEC claims the rules are clear, they clearly are not. The CFTC and SEC have issued conflicting views; Courts have questioned the SEC's lack of guidance; and the SEC itself, just last week, couldn't answer basic questions before Congress. 3/7
— paulgrewal.eth (@iampaulgrewal) April 27, 2023
The ripple community sees this as a potential tool in ascertaining their victory in their fight against the SEC. Some even went to the extreme length of suggesting Coinbase beg for the Ripple community's support.
Coinbase should be begging #Ripple and the #XRP community to help them fight the SEC
— XRPcryptowolf (@XRPcryptowolf) April 27, 2023
Coinbase should be begging #Ripple and the #XRP community to help them fight the SEC
— XRPcryptowolf (@XRPcryptowolf) April 27, 2023
Furthermore, in spite of providing support to the crypto exchange, the Ripple community also demanded the relisting of XRP on Coinbase. Back in 2020, following the SEC filing the lawsuit, Coinbase delisted the token, claiming they would not be listing any security. Reiterating that stance, the exchange stated,
"We didn't list securities then, and we still don't. We'd like to in the future, but the SEC has still not complied with the law by providing companies like Coinbase with a way to register to be able to do that. We do not relish litigation against the SEC, but we will vigorously defend ourselves – and stand up for the rule of law for everyone.
Whether Ripple and Coinbase come together over this mutual ground is yet to be seen, though.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.