Analyzing the Ripple and Coinbase Legal Dispute with the SEC: Potential Impacts on the Cryptocurrency Market
The crypto market has had a wonderful 2023 so far as a whole but in the background, the issue of regulation looms large. While the SEC is posturing over tighter regulations on one side, Coinbase is threatening to leave the states if it is not made clear what their plan is for cryptocurrencies going forward.
Coinbase CEO Brian Armstrong is known for his outspoken opinion and he came out strongly following last month's Wells notice which was the SEC warning Coinbase that they may face securities charges. Anything is on the table, including relocating or whatever is necessary," said Armstrong who did not take the SEC announcement lying down.
Coinbase has warned the SEC that any future regulatory measures taken against them will fail and have even claimed it will undermine the SEC's regulatory model. All of this comes off the back of news in the EU that many feel upcoming crypto regulations are not strong enough on exchanges like Binance.
So clearly there is a day of reckoning coming and anyone telling you they know these regulation arguments will go is lying to you. We decided to dig a little deeper to try to find out what is the likely outcome from all this posturing from Coinbase and the SEC and what it means for crypto in general in the USA and beyond.
While some may think the SEC standoff with Coinbase and the SEC case against Ripple (XRP) are unrelated, the outcome of the case could cause a domino-like effect across the market. At the heart of the case is a battle over control as the SEC wants to classify XRP as a security and therefore regulate it.
Included in Coinbases recent response to the Wells notice was the quote Coinbase does not list, clear, or effect trading in securities". So we can draw a substantial link here between the Ripple case and what might come down the line for Coinbase as a loss for the SEC really weakens any future charges they may try to bring against Coinbase.
Now unfortunately, this doesn't make things much clearer as this SEC vs Ripple case has been drawing on for years and we never seem to get to the end. It was supposed to be last November, then Ripple said they thought it would be this year sometime but now recent comments suggest we still could be waiting a while for any significant updates.
However, some positives to take away are Ripple is having a decent year and transactions have increased by 9% to 116 million this quarter. Add that to the fact that one of the SEC's expert's testimonies was stricken from the record and we can maybe start to reason that Ripple might be the likely winner of this case.
This is all just conjecture for now but the result of the case could be a very strong indicator of how much control the SEC will have over the crypto market in the future.
So what does this uncertainty mean? Well, it reinforces a trend we have seen from the start of the year, and that is more and more investors turning to new projects. There is nowhere that is clearer than in the meme coin market.
New projects like AiDoge (not to be confused with Arbdoge) and $SPONGE are experiencing incredible progrsss. While on the other end of this coins like Dogecoin (DOGE) and Shiba Inu (SHIB) are suffering as investors jump ship to move to these new projects.
A key factor here is inventors learning from the mistakes of the past and building better crypto ecosystems. Both AiDoge and Love Hate Inu have great viral properties like traditional meme coins but they have much better utility and have a strong underlying theme of security to show their investors they are protecting against rug pulls.
This meme coin trend is the most obvious but we can see it all around the market. Ecoterra (ECOTERRA) is still going through presale yet it looks like it will be by far the best green crypto the market has seen as it actually has real-life benefits for both the environment and its investors.
Ypredict (YPRED) and DeeLance (DLANCE) are two cryptos that are utilizing AI and Web 3.0 technologies to improve on options that are currently out there for their chosen audience. Innovation is the theme of these new projects that are improving on traditional cryptos that have gone before them.
The SEC is waging war on exchanges and the big boys of crypto. This is why looking for up-and-coming projects that won't be classified as a security is a great option for investors. We are unsure what kind of regulation we will end up with but the projects most likely to be unaffected by whatever comes down the tracks are the ones that we have mentioned.
Even though the crypto market has been enjoying a great 2023 the future still remains cloudy at best. The SEC is targeting some of the bigger more traditional cryptocurrencies and regulation could be terrible for their prices.
While this uncertainty remains, turning to promising new cryptos is the way to go. They are unlikely to feel the pinch of regulation while also offering their investors the chance to get in on the ground floor of a project that is heading to the moon.
Sources
- https://www.coindesk.com/business/2023/04/18/coinbase-could-move-away-from-us-if-no-regulatory-clarity-ceo-brian-armstrong/
- https://www.reuters.com/technology/coinbase-launches-international-crypto-derivatives-exchange-2023-05-02/
- https://www.cnbc.com/2023/04/27/coinbase-offers-fiery-response-to-sec-wells-notice-.html
- https://www.cnbc.com/2023/03/22/coinbase-warned-by-sec-of-potential-securities-charges.html
- https://cointelegraph.com/news/coinbase-may-face-years-long-court-battle-with-sec-ceo-warns-report
- https://www.investopedia.com/coinbase-could-leave-us-7482077#:~:text=The%20exchange%20began%20winding%20down,U.S.%20regulatory%20and%20economic%20environment.%22
- https://finbold.com/ripple-v-sec-case-update-as-of-may-1-2023/
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