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Is America about to unlock the "golden era" for crypto?
The Securities and Exchange Commission of the United States ( SEC ) is sending a clear signal about making a strong push to establish a comprehensive legal framework for the cryptocurrency sector, after officially concluding one of the most protracted legal battles in the industry's history.
The nearly 5-year lawsuit officially comes to a close
According to the filing submitted to the Second Circuit Court of Appeals last Thursday, the SEC and Ripple Labs jointly filed to withdraw their legal appeal, agreeing to bear all related costs and fees. This move officially closes the nearly five-year lawsuit between the two parties — a significant milestone for the entire cryptocurrency industry.
The legal battle between the SEC and Ripple began in December 2020, when the SEC accused Ripple of raising $1.3 billion through the sale of unregistered securities in the form of XRP tokens. In July 2023, Judge Analisa Torres ruled that XRP is not considered a security when sold to individual investors, but is deemed a security in transactions with institutions. By August 2024, Ripple agreed to pay a fine of $125 million, but the lawsuit continues to drag on to this day.
SEC Leadership: "Now is the time to focus on policy rather than litigation"
SEC Commissioner Hester Peirce stated that the termination of the lawsuit is a "positive step forward," opening up opportunities for stakeholders to move away from protracted legal disputes and shift focus to a more important goal: establishing a transparent legal framework that aligns with the rapid development of the digital asset industry.
In agreement, SEC Chairman Paul Atkins affirmed: "When the door to litigation closes, it is also the time we can focus all our efforts on drafting policy." He emphasized that the SEC's top priority in the upcoming period is to "shape a clear legal framework – one that both nurtures innovation and protects the legitimate rights of investors."
CLARITY Act – Important Legislative Step
The conclusion of the case coincides with the time when U.S. lawmakers are making a strong push for the passage of the (CLARITY Act) — a major effort to provide a clearer definition of digital assets and how they are regulated in the U.S. market.
This bill, strongly supported by Republican lawmakers, aims to establish a boundary between digital assets that are securities and digital assets that are commodities, while also creating a stable legal framework for startups and financial organizations operating in the blockchain sector.
However, the path forward still has many obstacles. Democratic lawmakers, led by Representative Maxine Waters, have strongly opposed, arguing that the CLARITY Act along with proposals such as the State Surveillance Against CBDC Act could threaten financial stability and the role of the U.S. central bank. Waters warned:
"The Republican Party is making a strong push for a dangerous cryptocurrency bill through Congress."
The closure of the Ripple lawsuit not only marks the end of a prolonged litigation period but also opens up a rare opportunity for regulators, lawmakers, and businesses to collaborate in building a clear, reasonable legal ecosystem that can pave the way for the sustainable development of blockchain technology and digital assets in the U.S.
If efforts like the CLARITY Act are completed and passed, the United States can once again assert its global leadership position in the 21st century financial revolution.
Lilly