Coinbase, a cryptocurrency exchange has submitted an amicus brief to support Ripple Labs during the U.S Securities and Exchange Commission’s (SEC), lawsuit regarding xrp. Coinbase’s support is seen as a significant step in the case given that the crypto exchange was among the first trading platforms to delist xrp following the SEC lawsuit.
Coinbase Backs SEC Ripple
Coinbase, a Nasdaq listed cryptocurrency exchange, filed Tuesday an amicus brief in support Ripple Labs (SEC) against the U.S Securities and Exchange Commission. Ripple’s CEO Brad Garlinghouse and Chris Larsen, the regulator, were sued over the sale XRP. They claim that the cryptocurrency token was a security.
Since the SEC lawsuit was filed, “multiple U.S. exchanges delisted XRP, causing its market value to decline by $15 billion, resulting in significant losses to Coinbase’s customers,” the counsel for Coinbase explained in the filing, noting:
Coinbase feels that Ripple should be allowed to defend fair notice in cases where they face surprise enforcement actions, such as this.
In its amicus brief, Coinbase argued that “existing due process precedents prohibit unforeseen enforcement actions” and “SEC rulemaking is essential to account for new technology in the crypto space.” In addition, “a robust fair notice defense is critical in the absence of crypto rulemaking.”
“Until the SEC engages in rulemaking for cryptocurrency, the fair notice defense is a constitutionally required brace against arbitrary, surprise cryptocurrency enforcement actions,” Coinbase asserted. “In the absence of such regulations … preventing Ripple’s fair notice defense from even being heard at trial will not only undermine Ripple’s ability to avail itself of a defense afforded by the basic tenets of due process, but will also give the SEC no incentive to engage in the rulemaking work the cryptocurrency industry and its customers need.”
A number of people on social media have expressed that Coinbase’s move is significant given that the crypto exchange was among the first to delist XRP following the SEC lawsuit against Ripple. Coinbase stopped trading in XRP after the securities regulator filed its suit on December 22, 2020.
Strategy advisor at Vaneck/MVIS Gabor Gurbacs commented: “Coinbase suspended XRP trading when the SEC sued Ripple alleging that XRP is a security. The case was not decided by the SEC, and many other platforms followed Ripple’s lead in delisting XRP. Coinbase now supports XRP vs. the SEC. The lesson: follow & comply with the law, but don’t try to be the judge/regulator.”
Tony Edward, host of Thinking Crypto Podcast tweeted:
I don’t think folks realize how significant it is that Coinbase is filing an amicus brief on behalf of Ripple in the SEC lawsuit. The industry as a whole sees Ripple winning.
Last month, Ripple’s CEO said that he expects an answer in the SEC lawsuit in the first half of 2023. Ripple will consider a settlement in the event that the SEC declares that XRP does not constitute a security. The executive stressed that the XRP case “is about the whole [crypto] industry.”
Do you have any thoughts about Coinbase’s support for Ripple? Please leave your comments below.
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