Ripple CTO, David Schwartz, has criticized the SEC’s actions against Coinbase, suggesting that they may be motivated by incompetence or a desire to protect insiders and early investors. It comes after Coinbase received a Wells notice from the SEC over its plans to launch a lending product.
Schwartz’s comments were in response to a tweet by CEO and co-founder of Lightspark, David Marcus, who praised Coinbase for playing by the rules and engaging with regulators. However, this led to a debate on whether Coinbase had indeed been playing by the rules, with some suggesting that they had listed unregulated securities on their exchange.
LexproofHQ’s CEO weighed in on the debate, stating that the Howey test is not simple as it applies to crypto, and even top securities lawyers don’t know how it applies to many tokens. He warned against falling for Gary Gensler’s parroting of this false line.
Schwartz then commented that the SEC’s actions might be motivated by a desire to protect insiders and early investors, which could result in retail investors bearing the brunt of the losses due to litigation.
Coinbase Vs. SEC: The Battle For Clarity In The Crypto Industry
Many top faces in the crypto industry also backed Coinbase against the SEC. Stuart Alderoty, Chief Legal Officer of Ripple, tweeted that the enemy of my enemy is my friend.
Attorney Jeremy Hogan stated that the SEC is not an independent agency making rules based on the law but a political enforcement arm of the administration and its views, stating that only the courts can save us now. Founder of Crypto-Law.us, John E Deaton, called the SEC a disgrace.
Craig DeWitt, Founder of Supermojo, suggested that with the Wells notice against Coinbase and the chance of a big Ripple court win, XRP could become one of the few assets available for trading in the US.
The ongoing discussion regarding Coinbase’s compliance with regulations underscores the necessity for unambiguous guidelines within the cryptocurrency sector.
However, the absence of such clarity has created confusion and doubt, potentially resulting in adverse effects for investors and the industry as a whole. Therefore, regulatory bodies must establish transparent directives that facilitate legal operations and safeguard investor interests.
Related Reading | Coinbase Receives SEC Wells Notice; Calls For Clarity In Regulatory Environment