Caroline Pham, a commissioner of the Commodities Futures Trading Commission (CFTC), has said that the recent legal victory of Ripple against the U.S. Securities and Exchange Commission (SEC) would pave the way for regulatory clarity in the U.S. cryptocurrency industry.
In an interview with Bloomberg TV on July 17, 2023, Commissioner Pham expressed her beliefs that the recent court rulings on the classification of crypto assets will ultimately lead to a more defined regulatory landscape and increased certainty for the industry.
Thank you @BloombergTV for the opportunity to talk about our important GMAC initiatives! Beyond crypto, institutional markets & central banks are looking at tokenization of real assets like bonds. Today, we heard about international, US & EU developments & key takeaways. https://t.co/cWTShDy2Bf
— Caroline D. Pham (@CarolineDPham) July 18, 2023
Last year, Commissioner Pham predicted that the legal situation surrounding digital assets would become clearer through court decisions. Now, her prediction has come true as important court rulings are bringing about clearer rules and guidelines.
During the interview, Commissioner Pham emphasized the importance of collaboration among various American authorities, including the U.S. SEC, to develop a comprehensive approach to cryptocurrency regulation. She maintained that this is necessary to foster a well-defined regulatory landscape. She also signalled her desire to participate in regulatory working groups dedicated to this aim.
The U.S. SEC had accused Ripple of selling unregistered securities when it listed its native token, XRP, on crypto exchanges. However, on July 13, 2023, Judge Analisa Torres of the Southern District of New York ruled that XRP did not qualify as a security when sold to ordinary investors on digital asset exchanges.
Gary Gensler, chair of the U.S. SEC, expressed disappointment with the court’s decision during a press conference on July 17, 2023. Gensler reaffirmed the securities regulators’ commitment to enforcing the current regulations despite the ruling in favor of Ripple.
While Gensler has previously indicated his belief that all digital assets, except for Bitcoin, should be classified as securities, the SEC has not formally made this assertion.
Following the court ruling, major cryptocurrency exchanges quickly resumed trading XRP on their platforms, as it had been delisted during the legal battle. Leading exchanges such as Kraken, Crypto.com, and Coinbase have already resumed trading XRP, with Gemini indicating it may follow suit.
The outcome of the Ripple vs. SEC legal battle and the subsequent discussions among regulators and industry participants represent a pivotal moment for the cryptocurrency industry in the United States.
The court ruling and ongoing debates will play a significant role in shaping the future regulatory framework for cryptocurrencies. They offer the much-needed clarity that would open doors for further innovation and adoption in the digital asset space.
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