“We’re Not Going to Kick Down the Door”

In a recent interview, Atkins underlined that sudden enforcement actions for technical violations are no longer the norm. Instead, businesses will be given the opportunity to address issues ahead of time. “It’s not right to suddenly knock on a company’s door and impose penalties over a minor technical breach. Firms should expect to be notified first,” Atkins explained.

A Break from the Gensler Era

This policy marks a clear departure from the approach under former SEC Chair Gary Gensler. During his tenure, the SEC launched high-profile lawsuits against some of the biggest names in crypto, including Ripple Labs (2020), Terraform Labs (2022), and exchanges such as Binance, Coinbase, and Kraken in 2023. These actions not only disrupted the industry but also cost companies billions in legal fees.

Ending the “Shoot First, Ask Questions Later” Approach

Atkins criticized past enforcement decisions, noting that many lacked legal precedent and predictability. “The SEC was acting without clear grounding, often shooting first and asking questions later,” he said. Under his leadership, businesses could be granted up to six months to make necessary adjustments before enforcement measures are considered.

Most Tokens Are Not Securities

Another significant shift is Atkins’ stance on digital assets. He argued that the majority of cryptocurrencies should not fall under securities laws. Moreover, he expressed support for tokenized versions of stocks and bonds, stressing that they should carry the same legal rights as their underlying traditional assets.

Signs of a New Era at the SEC

Following his confirmation on April 9, Atkins has already begun restructuring the agency’s approach to digital assets. The SEC has formed a dedicated “Crypto Task Force” to work more closely with the industry, while several investigations and enforcement actions initiated under the previous leadership have been dropped.

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In a February 25 X post, Uniswap stated that the SEC had concluded its probe and would not pursue any enforcement action. This announcement follows reports that Uniswap received a Wells Notice from the SEC in April 2024, during the tenure of then-Chair Gary Gensler.

Uniswap described the move as “a huge win for DeFi,” emphasizing that their technology aligns with legal frameworks and their work stands on “the right side of history.”

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Is the SEC Shifting Its Stance on Crypto Regulation?

In February, the SEC held meetings with representatives from various firms, suggesting possible changes in crypto regulations. SEC Commissioner Hester Peirce, who leads the commission’s crypto regulatory efforts, stated that the agency should wait for a Senate-confirmed chair before charting a new regulatory course.

However, with the closure of investigations into Uniswap, Coinbase, and Robinhood Crypto, it appears that the SEC is rapidly changing its approach to crypto enforcement. Some experts suggest that all pending cases, including the ongoing appeal against Ripple Labs, could be paused or withdrawn altogether.

Notably, before U.S. President Donald Trump took office, reports indicated that the SEC was considering freezing all crypto enforcement cases that did not involve fraud. Under Project 2025, the Trump administration aims to “remove regulatory impediments” at the SEC, further signaling a shift in the commission’s stance toward digital assets.

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The post SEC Backs Off: Uniswap Announces End of Investigation appeared first on Coin Engineer.

Can XRP Be a US Crypto Reserve Asset?

The idea of holding cryptocurrency in national reserves has evolved significantly in recent years. Initially, Bitcoin, with its fixed supply and decentralized nature, was seen as the strongest candidate. Regarded as digital gold, Bitcoin was considered a hedge against inflation. However, its volatility and regulatory uncertainties posed obstacles to its acceptance as a reserve asset. Additionally, concerns about Bitcoin’s energy consumption contributed to these challenges.

As a result, debates began about whether Bitcoin alone could be sufficient for a US crypto reserve. Other cryptocurrencies, such as XRP, started to emerge as viable alternatives. Compared to Bitcoin, XRP offers faster transaction speeds and lower fees. Ripple’s integration with banking systems and its efficiency in cross-border payments make XRP a more practical payment solution. With the ability to process transactions in seconds and its low-cost transaction features, XRP is considered an ideal candidate for a national crypto reserve.

However, XRP faces its own set of challenges. Discussions about decentralization persist, and the large token holdings by Ripple Labs may centralize control over the network. Moreover, the 2023 legal battle with the SEC has raised regulatory uncertainties, with the potential for XRP to be classified as a security, complicating its inclusion as a reserve asset. XRP’s market capitalization also remains significantly lower than Bitcoin’s—while Bitcoin’s market value stands at $2 trillion, XRP’s is only around $175 billion.

In conclusion, the debate over US crypto reserves has become more complex. While XRP offers fast transaction capabilities and strong integration into financial infrastructure, issues of centralization and regulatory uncertainty prevent it from being accepted as a reserve asset.

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Ripple Labs CEO Brad Garlinghouse announced that the New York Department of Financial Services (NYDFS) has approved the company’s RLUSD stablecoin after months of evaluation.

In a post on X on December 10, Garlinghouse stated that following the NYDFS approval, Ripple will soon announce exchange and partner listings for RLUSD. The company had launched plans for this stablecoin in April, positioning it as a competitor to Tether’s USDT and Circle’s USD Coin.

Brad GarlingHouse’s tweet:

Ripple executives have predicted that the stablecoin could reach a market value of $2 trillion by 2028.

The company began testing RLUSD in August on the XRP ledger and Ethereum mainnet, and in October, it announced partnerships with exchanges such as Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish.

In September, Garlinghouse mentioned that Ripple planned to focus RLUSD on institutional players. As of December 10, the combined market value of USDT and USDC was recorded at approximately $180 billion.

How will Ripple manage both XRP and RLUSD?

Like other USD stablecoins, RLUSD will be pegged 1:1 to the US Dollar.

In April, Ripple announced plans to back the tokens with USD deposits, short-term US Treasury bonds, and “other cash-like assets.”

In June, Ripple President Monica Long stated that RLUSD would be “complementary and additive” to XRP.

Garlinghouse appeared in a 60 Minutes segment aired on December 8, discussing the cryptocurrency industry’s influence on the 2024 United States elections.

Ripple is also engaged in an ongoing legal battle with the US Securities and Exchange Commission (SEC) regarding XRP token offerings.

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Ripple, which has been in a protracted legal fight with the SEC over the past few years, claimed on Thursday that financial penalties suggested by the agency were irrational in a “notice of supplemental authority.” The company contrasted fines against Terraform Labs against the SEC’s suggested $2 billion fine for selling XRP. Ripple has maintained that the penalties ought to be around $10 million.

Comparing Penalties with Terraform

The judge signed off on the settlement after Terraform agreed to pay fines of $4.47 billion on Wednesday and subsequently on Thursday.

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“The civil penalty sought by the SEC in Terraform shows the unreasonableness of the civil penalty sought by the SEC in this case,” ripple’s lawyers argued. “As Ripple’s opposition stated, the SEC has consented to civil penalties ranging from 0.6% to 1.8% of the defendant’s gross profits in similar (and even more egregious) circumstances. Terraform conforms to that pattern.”

Ripple also mentioned the April judgment verdict finding Terraform Labs and cofounder Do Kwon engaged in civil fraud.

Ripple’s Defense Against Excessive Penalties

“Here, by contrast, the SEC seeks a civil penalty far exceeding that range, even though there are no allegations of fraud in this case and institutional buyers did not suffer substantial losses,” the lawyers noted. “Terraform thus confirms that the Court should reject the SEC’s disproportionate and unprecedented request and that an appropriate civil penalty would be no more than $10 million.”

Years after the SEC said the company raised $1.3 billion via XRP, which it claims is an unregistered security, the SEC and Ripple have been fighting in court. Judge Analisa Torres of New York decided last year that a blind bid system in place for XRP allowed some of company’s sales—called programmatic—not to violate securities laws. She did, however, decide that other direct token sales to institutional investors qualified as securities.

The post Ripple Lawyers Push Back Against $2 Billion SEC Penalty appeared first on Coin Engineer.

Standard Custody’s Regulatory Edge

Standard Custody CEO Jack McDonald will be named as Ripple’s senior vice president of stablecoins under the terms of the agreement, therefore serving both Standard Custody’s CEO role and another.

Pointing to Standard Custody’s regulatory approval from the New York Department of Financial Services (NYDFS), one of the toughest financial authorities when it comes to digital assets, Ripple underlined Standard Custody’s licensing as a fundamental capability of the digital asset custodian.

Expanding Ripple’s Custody Services

Standard Custody comes after Metaco, another digital asset custody company acquired by Ripple for $250 million in 2023. The purchase of Metaco by Ripple was highlighted by the conviction that, as banks strive to offer their clients digital asset custodial services, the institutional crypto custody market will reach $10 trillion by 2030.

Within the context of custody services, real-world asset tokenization—a market that Chainlink estimates might reach over $800 trillion if all the capital assets in the world are tokenized—is included.

Tokenization: The Next Frontier

For companies like Ripple Labs, Chainlink, and Algorand, real-world asset tokenization has become a top priority; the developing tokenizing sector is generally thought to be the next great frontier for cryptocurrencies, blockchain, and digital assets.

Leveraging Chainlink’s CCIP interoperability protocol, the Depository Trust and Clearing Corporation (DTCC) released in May its report of a real-world asset tokenizing pilot program run between the DTCC and several major banks, including JP Morgan, Edward Jones, and BNY Mellon.

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The initiative sought to replicate bringing real-world data onchain and evaluate the tokenizing of fund data. The DTCC’s research found several advantages of blockchain tokenization, including automated data management and lowering of the need for record-keeping, real-world transparent APIs for consumers, and the possibility to produce “dynamic data management across the life cycle of an asset.”

In the end, the pilot study gave banks and other institutional operators hoping to use blockchain tokenization in their products and services—such as automated data feeds or trading applications—insight into possible future uses.

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The post Ripple Acquires Standard Custody for Stablecoin Launch appeared first on Coin Engineer.

In its filing, Ripple argued against the SEC’s remedial requests, labeling them as evidence of administrative overreach. The company’s lawyers emphasized that the SEC has not proven reckless conduct and that the requested disgorgement and penalties exceed legal precedents. Notably, Ripple highlighted that the proposed penalty is over 20 times greater than what the SEC has obtained from any other defendant in a digital-asset case.

Furthermore, Ripple redacted specific financial details in its filing, including revenue from institutional sales, income taxes paid, and losses. The company asserted that it had no gains to disgorge, challenging the basis for the SEC’s proposed penalties.

Overall, Ripple’s opposition signals a firm stance against the SEC’s punitive measures, advocating for a significantly reduced civil penalty in the final judgment.

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The SEC’s request for the substantial fine was disclosed by Alderoty in a post on March 25, with the details of the filing under seal until March 26. This civil case against Ripple has been unfolding since the SEC’s initial filing in 2020.

Alderoty criticized the SEC’s approach, accusing the regulator of overstepping its authority and aiming to intimidate Ripple and the wider industry. He expressed confidence in the court’s fairness during the remedies phase.

Ripple intends to respond to the SEC’s request in April, with Alderoty asserting that the regulator has been misleading in its statements. Ripple CEO Brad Garlinghouse also condemned the SEC’s actions, emphasizing the unprecedented nature of the proposed $2 billion fine and pledging to continue challenging the regulator’s assertions.

The SEC’s lawsuit, filed in December 2020, alleged that Ripple had conducted unregistered securities sales amounting to $1.3 billion through its XRP token offerings. However, a significant ruling in July 2023 by Judge Analisa Torres determined that XRP was not a security in certain contexts, which led to the dismissal of charges against Garlinghouse and co-founder Chris Larsen in October 2023.

Despite this development, the SEC’s legal battles with crypto firms persist, with ongoing civil lawsuits against prominent entities such as Coinbase, Binance, and Kraken.

This latest revelation underscores the high stakes and contentious nature of the legal proceedings between Ripple and the SEC, with significant implications for the cryptocurrency industry as a whole.

The post Ripple Faces $2 Billion SEC Fine Despite XRP Not Being Security appeared first on Coin Engineer.

Experts Say There is No Settlement Between Ripple Labs and SEC

A recent court ruling, issued by Judge Sarah Netburn, has granted Ripple an extension until February 20th to fulfill the financial disclosure requirements, introducing an eight-day delay in the legal proceedings. While this extension has fueled speculation about a potential settlement, the deadline for rebuttals in the remedies stage, set for April 24th, indicates a prolonged legal process ahead, casting uncertainty over the near future.

Legal voices within the XRP community have emphasized the confidential nature of settlement negotiations, debunking the rumors. Bill Morgan, a seasoned attorney, highlighted the confidentiality of such negotiations, emphasizing that settlement talks remain undisclosed until an agreement is reached. Similarly, Jesse Hynes, another legal expert, dismissed the rumors as baseless, noting that leaks regarding settlement talks are often strategic moves for leverage rather than factual indicators.

Since the inception of the lawsuit in December 2020, Ripple has faced legal challenges related to the SEC’s scrutiny of its institutional sales of XRP. Despite legal turbulence impacting XRP’s market performance, Ripple has secured victories in court, including the determination that XRP is not a security and the dismissal of the SEC’s case against Ripple executives Brad Garlinghouse and Chris Larsen. However, the saga continues as the legal battle unfolds.

The post XRP Lawsuit: Ripple-SEC Settlement Rumors Debunked by Experts appeared first on Coin Engineer.

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U.S. District Judge Sarah Netburn is considering the latest chapter in the legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). The focus of the dispute is Ripple’s financial condition and institutional sales agreements; the SEC hopes to examine this information in hopes of bolstering its case in the ongoing litigation.

In a letter to Judge Netburn on January 11, the SEC requested an order compelling Ripple to produce its financial statements for 2022 and 2023 and institutional sales agreements made since the company was sued by the SEC in late 2020. In a summary judgment in July, Judge Analisa Torres found that XRP’s institutional sales passed the Howey test and were equivalent to securities sales.

Ripple responded to the SEC’s request in a letter to Judge Netburn on January 19, stating that the discovery phase of the case was completed in August 2021. It argued that actions taken during that time period were not relevant to the case. It also argued that the issue of whether it has the ability to pay potential penalties is irrelevant because it did not plan to make such a claim.

I said 4 days ago that the SEC needed to show Judge Torres that ordering discovery of the post complaint contracts will not lead to a mini-trial of the status of post contract sales as Ripple argues. This is an extract from the SEC’s just filed Response courtesy of @FilanLaw who… https://t.co/qV6XhVVdZw pic.twitter.com/ZHTZDnG83u

— bill morgan (@Belisarius2020) January 24, 2024

The SEC filed a response on January 23,

The SEC filed a response on January 23, arguing that Ripple “has not even alleged that it would be harmed by producing its latest financial statements.”

“In determining the amount of a penalty necessary to deter future misconduct, the financial condition of the defendant is a relevant factor,” the SEC argued in its response.

Unpacking the SEC's reply to #Ripple
(#5 will be discussed!)
The SEC wants 3 things:
1) Audited financial statements for '22 & '23
2) All post-complaint contracts for #XRP sales
3) The XRP Institutional Sales proceeds received after the complaint
1/7https://t.co/A6Qoj7pruZ

— WrathofKahneman (@WKahneman) January 24, 2024

The response also notes that Judge Torres has left open the possibility of further discovery proceedings. According to the SEC, Ripple’s financial position and post-litigation actions are indeed relevant because the Securities Act (likely enacted in 1933) “considers interventions in cases where ‘violations are likely to occur'” and can help determine the likelihood of a violation recurring. Moreover, because of the definition of a sale, compliance with a post-litigation order could affect the amount of disgorgement.

The case is still ongoing, and it is unclear when Judge Netburn will rule on the SEC’s request. The outcome of the case could have significant implications for the cryptocurrency industry as a whole.

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