Trump's victory boosted the cryptocurrency market, with investors betting that the Trump administration will formulate policies favorable to the cryptocurrency industry, and the current chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, announced his resignation on the morning of January 20, further fueling market optimism.
XRP Surges
With the SEC chairman about to change, the long-running Ripple case has seen more positive news. CoinGecko data shows that XRP surged more than 25% to $1.39 today, hitting a new high since April 2021, with a 151.6% increase over the past 14 days.
XRP price chart. Source: CoinGecko
Ripple, the issuer of XRP, has been embroiled in a lawsuit with the SEC since December 2020, with the SEC accusing Ripple of raising $1.3 billion through the unregistered security XRP since 2013.
The latest litigation progress is that Judge Analisa Torres reiterated her July 2021 ruling in August this year, stating that Ripple's sale of XRP to retail investors through exchanges did not violate securities law, and regarding the SEC's demand for a huge fine, the judge decided to fine Ripple $125 million after determining that Ripple's sale of XRP to institutions violated securities law, much lower than the SEC's demand of $2 billion.
The judge also issued an injunction against Ripple, requiring it not to violate securities law again.
It has recently been reported that the SEC is seeking to appeal Analisa Torres' latest ruling on XRP, but with Gary Gensler's impending departure, the next SEC chairman is expected to be crypto-friendly, which may affect the outcome of the Ripple case.
Which Crypto Companies Targeted by the SEC May Benefit?
Currently, Trump has not officially announced his choice for the new SEC chairman, but according to The Washington Post, citing five informed sources, Trump's advisers are considering nominating current regulatory officials, former federal officials, and financial industry executives who support cryptocurrencies for this important position. If this information is true, the market can expect a more crypto-friendly SEC. This change may significantly ease the previous harsh regulatory policies towards the cryptocurrency industry, and may even lead to the softening, settlement, or withdrawal of lawsuits against certain companies.
Here are some major crypto companies that may benefit from this change:
BNB The SEC sued BNB and its founder CZ last year for operating an unregistered securities exchange, and revised the lawsuit in September this year, reiterating the allegations of violating federal securities law. If the regulatory environment relaxes, these allegations may receive more lenient treatment.
Coinbase The SEC has accused Coinbase of illegally providing billions of dollars worth of securities trading and allowing customers to earn rewards from securities products since 2019 without registering as a securities exchange, broker, or clearing agency. In the future, these allegations may be re-examined or modified.
Kraken Kraken has been sued by the SEC for failing to register as a broker, exchange, or clearing agency, with some of its transactions being classified as investment contracts and thus securities. If the new chairman takes a more lenient approach, these disputes may also be eased.
In addition, the current SEC chairman, Gary Gensler, has stated that most cryptocurrencies, including SOL, ADA, and Matic, should be classified as securities, except for Bitcoin and Ethereum. This stance has long been criticized as too arbitrary, especially in the absence of a clear regulatory framework, forcing cryptocurrency companies to operate in a "gray area". If the new chairman adopts a more accommodating regulatory stance, it may provide more development space for these assets and companies.
As Gary Gensler's resignation date of January 20 next year approaches, the market sentiment is becoming more optimistic. In the future, the SEC's policy orientation may affect the overall landscape of the cryptocurrency industry, creating a more friendly regulatory environment and new possibilities for industry innovation.
