Whether XRP is classified as a security in the lawsuit against Ripple will have significant ramifications for the two pending lawsuits against Coinbase and Binance.
Ripple lawsuit of great importance
The judges presiding over Coinbase and Binance’s lawsuits are likely to closely monitor the lawsuit between the SEC and Ripple.
Ripple has been in a legal battle with the US Securities and Exchange Commission since December 2020. The regulator accused Ripple of offering unregistered securities through XRP since 2013.
On June 6, the SEC filed a lawsuit against Coinbase, alleging that Coinbase also offered unregistered securities. A day earlier, they had filed a similar lawsuit against Binance.
Lawyer James Murphy, better known as “MetaLawMan” on Twitter, explained in a series of tweets on June 9 that a positive outcome for Ripple could set a precedent for both Coinbase and Binance.
The stakes surrounding the SEC’s decision are mounting, and here’s why. If Judge Torres rules that the XRPs traded on secondary markets are not considered securities, it would completely undermine the foundation of the case against Coinbase and overturn a significant portion of the lawsuit against Binance.
– MetaLawMan
However, he also warns that a ruling by Judge Torres in the Ripple case would not necessarily set a binding precedent for these recently filed cases.
This means that the judges for the Coinbase and Binance lawsuit are not required to rule in the same way. Only decisions of the Court of Appeal and the Supreme Court have that influence.
The SEC has now deliberately started the lawsuit against Binance and Coinbase
XRP attorney John Deaton suspects the SEC is aware that Judge Torres’ decision in the Ripple case will be published soon.
Deaton suggests the SEC deliberately brought these new cases in at this time should it face an unfavorable verdict in the lawsuit against Ripple.
Deaton suggests the SEC deliberately brought these new cases in at this time should it face an unfavorable verdict in the lawsuit against Ripple.
Only when the crypto market comes into the hands of major banks will the SEC stop
Attorney Murphy believes that Judge Reardon, who is assigned to the Coinbase case, will pay particular attention to the determination of whether or not XRP is a security. Both judges serve on the same lower Manhattan court.
XRP attorney Bill Morgan, a consultant at Morgan Mac Lawyers, also believed Ripple’s case could impact Binance and Coinbase’s business.
Morgan explained that the outcome of the Ripple lawsuit could be used as an “advantage” for the crypto industry. Or from the SEC, depending on the result.
He believes that the SEC will moderate its attacks on crypto companies once major financial institutions acquire a significant share of the crypto market.
Once players like JPMorgan or Goldman Sachs get their hands on a larger share of the crypto market, the SEC is likely to take a more dovish stance.
— Morgan