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On August 1, the Chamber of Digital Commerce (CDC) released a report entitled “SEC v Ripple Ruling: Impact and Analysis” on the SEC vs. Ripple Ruling, examining the Security Exchange Commission’s lawsuit against Ripple.
In the SEC v. Ripple case, the court adopted 🔑 key themes from The Chamber's amicus brief.
We're going to keep fighting for consumers and innovators. Read the analysis and stay tuned: https://t.co/FTQNhwZnHh
— The Digital Chamber (@DigitalChamber) August 4, 2023
This report examined how, for the first time, the court used the Howey multi-legal factor test to determine the different types of XRP distribution: institutional sales, programmatic sales, and other distributions.
The report emphasized that Judge Torres’s ruling establishes an important legal decision by property differentiating an investment contract from an investment asset.
“We were pleased to see that the court’s interpretation of the issues surrounding the legal classification of digital assets is aligned with the arguments outlined in The Chamber’s amicus brief. “CDC wrote the report.
“This case is a big milestone in the process of setting clear and consistent sets of rules for our industry; we are also encouraged by the legislation also in play,” said Perienne Boring, CEO and Founder of the CDC.
She also expressed the need for a level playing field in the digital asset industry.
Subject of Investment Contract is Separate From Investment Contract – Amicus Brief
In the Amicus brief, filed on September 14 last year, CDC argued that the subject of investment is not inherently a security and should not be treated that way.
“Care needs to be taken to not conflate a digital asset with the circumstances of its initial offering,” the brief noted.
According to CDC, Judge Torres’ decision to state that XRP is in itself not a contract, transaction, or scheme echoes the Chamber’s sentiment regarding this issue.
Lilya Tessler, Partner and Head of Sidley Austin LLP’s Fintech and Blockchain group and representing The Chamber as Amicus Curiae, said that the Court adopted key themes from the Chamber’s Amicus brief by setting a clear legal precedent that a digital asset, similar to a tangible and intangible asset that is subject to an investment contract, is different from the investment contract itself.
Comprehensive and Effective Legislation Needed for Regulatory Clarity – Chamber of Digital Commerce
While the Ripple ruling was a definite positive for the entire crypto industry, the Chamber of Digital Commerce still pushes for comprehensive and effective legislation to introduce regulatory clarity.
Stating that introducing the recent blockchain and digital asset regulatory bills is encouraging, CDC said, “We are hopeful these bills will continue to move through the legislative process.”
However, the Chamber remains apprehensive about enacting these bills, citing the “Lingering partisan opposition to passing digital asset legislation” as a significant roadblock.
Representing 200 companies, tech firms, investment firms, and law firms, the Chamber of Digital Commerce promotes the use of blockchain in the economy through education, advocacy, and by working closely with policymakers, regulatory agencies, and the industry.
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