The victory of Trump in the election has driven a surge in the cryptocurrency market, as investors bet that the Trump administration will formulate policies favorable to the growth of the cryptocurrency industry. Furthermore, the current chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler,
announced this morning that he will resign on January 20 next year, further fueling the market's optimistic sentiment.
XRP Surges
With the SEC chairman about to change, the long-running XRP case has seen more positive developments.
Data from Coingecko shows that XRP surged over 25% to $1.39 today, reaching a new high since April 2021, with a 14-day gain of 151.6%.
The issuer of XRP, Ripple, 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 legal development is that Judge Analisa Torres
reaffirmed last July's ruling that Ripple's sale of XRP through exchanges did not violate securities laws. Regarding the SEC's request for a massive fine, the judge decided to impose a $125 million fine on Ripple for its institutional sales of XRP in violation of securities laws, far lower than the $200 million requested by the SEC.
Further Reading: Court Rules Exchange Sales of XRP "Did Not Violate Securities Laws", but Ripple Fined $125 Million, Causing a 20% Jump
It was recently reported that the SEC has sought to appeal Analisa Torres' latest ruling on XRP, but with Gary Gensler's impending departure, the next SEC chairman is expected to be more crypto-friendly, which may influence the direction of the Ripple case.
Which Crypto Companies Targeted by the SEC May Benefit?
While Trump has not yet officially announced his pick for the new SEC chairman, the Washington Post recently cited information from five informed sources
indicating that Trump's advisers are considering placing current regulatory officials, former federal officials, and financial industry executives in key leadership positions, many of whom have publicly expressed support for cryptocurrencies.
The market can expect a crypto-friendly SEC, which means that companies like Ripple, previously suppressed and sued by the SEC, may see their lawsuits softened, settled, or even withdrawn. Here are a few major crypto companies that may benefit:
- Binance: The SEC charged Binance and its founder CZ last year for operating an unregistered securities exchange, and filed an amended complaint this year, reiterating the allegations of Binance's violations of federal securities laws.
- Coinbase: The SEC charged Coinbase last year for providing trading, brokerage, and clearing services for unregistered securities, handling billions of dollars in transactions of "securities" cryptocurrencies and allowing customers to earn rewards on security products since 2019.
- Kraken: The SEC charged Kraken, alleging that Kraken failed to register as a broker-dealer, exchange, or clearing agency, and that some cryptocurrency transactions on its platform constituted investment contracts and were therefore securities.
Additionally, Gary Gensler has persistently claimed that most digital assets, except for Bitcoin and Ethereum,
are securities, a stance that has been criticized by the crypto industry as overly arbitrary, forcing crypto companies to operate in a regulatory vacuum. This situation may also change going forward.
Further Reading: SEC Sues Kraken, Reiterates that SOL, ADA, and 11 Other Tokens "Are Securities"
