The legal battles involving Ripple Labs and Coinbase have been at the center of speculation that arose on social media and some news outlets early this week.
Many mentioned a document shared by Coinbase on August 13 as a sign of the prolongation of its legal fight. The document was submitted to the SEC, the U.S. government agency created to regulate the financial market in the region. In this document, the platform requested “Reopening of the comment period for amendments related to the definition of exchange.” Below, we analyze the legal challenges that led to the sharing of this document.
The Challenge of Ripple
Ripple Labs’ legal battle began in 2020. At the time, the company was accused of improperly trading its token by the SEC. Initially, the agency intended to fine the creator of the cryptocurrency Ripple (XRP) approximately 2 billion euros.
After 4 years, U.S. District Judge Analisa Torres established that Ripple Labs did not violate federal laws when trading its token on public platforms. However, it was found guilty of violating those laws when selling XRP to select investors. As a result, the company was fined 113.5 million euros.
The Challenge of Coinbase
When Ripple Labs’ legal battle came to an end, Coinbase was the first platform to publicly announce the relisting of XRP. This quick relisting signaled the empathy of a company still fighting its own battle against the SEC.
In June 2023, Coinbase was accused of “offering and selling unregistered in connection with its staking program,” as indicated in a press release from the SEC. Almost a year later, Judge Katherine Failla decided that “the SEC adequately alleged that Coinbase, through its staking program, participated in the offer and sale of unregistered securities.”
Although both legal battles recently received decisions, the case regarding the Coinbase platform is far from over. The company is currently awaiting the outcome of a lawsuit it filed against the SEC for violation of its right to information. If escalated, the case could reach the U.S. Supreme Court and influence regulatory frameworks in the long term.
In the meantime, Coinbase remains one of the most popular platforms in the market. The company operates in 100 countries and offers a wide variety of cryptocurrencies. European investors can easily purchase Bitcoin, Ethereum, Solana, and over 236 other tokens on the platform.
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