In the United States, the Chamber of Digital Commerce (CDC) has received a favorable opinion from the federal court for the Southern District of New York to participate as an “amicus curiae” (Latin term which literally means “friend of court”) in a lawsuit that was initiated by the Securities and Exchange Commission (SEC) against Ripple Labs, the company behind the cryptocurrency XRP.
SEC declares Ripple a security
The case kicked off in 2020 when the SEC filed a lawsuit against Ripple, claiming its sale of XRP constituted an unregistered securities offering worth over $1.38 billion.
If the judge rules in favor of the SEC, it could set the precedent the commission needs to pursue legal action against many other crypto projects.
Due to the consequences that this decision could have on the entire crypto ecosystem, we therefore understand why the stakes of this trial are important and that the latter is actively followed by the community.
Created in 2014 by Perianne Boring, the CDC is a private lobbying group based in Washington with the aim of promoting the blockchain sector and crypto-assets. And the fact that he is now declared as an “amicus curiae” does not please the SEC at all.
The Securities and Exchange Commission requested the court to obtain more preparation time for the filing, but Ripple objected to this request from the SEC and stated:
“This is yet another attempt to further delay the resolution of this matter. »
Ripple’s chances of winning this lawsuit are slim according to a number of experts like crypto industry lawyer Preston Byrne, who is of the opinion that under the exact regulations of the Supreme Court XRP would indeed be a security.
However, this did not prevent Brad Garlinghouse, the general manager of Ripple, from responding to Paris Blockchain Week:
“The trial is moving in a much better direction than I could have envisioned last year. »
If Ripple is convicted as a result of this lawsuit, then XRP will be recognized as a security. This means that most exchanges will be forced to register officially with the SEC. Additionally, exchanges will also need to collect the identities of all their users.