Lawsuit Against Ripple Is Driven By High-Ranking Officials, Says Crypto Lawyer

  • The SEC lawsuit against Ripple is being driven by high-ranking officials, according to Jake Chervinsky.
  • With Coinbase and OKCoin, other well-known exchanges have announced the suspension of trading with XRP.

Prominent crypto lawyer Jake Chervinsky commented a few days ago on the change of leadership at the U.S. Securities and Exchange Commission (SEC) and its influence on the lawsuit against Ripple Labs. According to the general counsel at Compound, the chances are rather low that Jay Clayton’s resignation will make an impact in favor of Ripple.

Although his successor, Elad Roisman, is considered more crypto-friendly, Chervinsky says optimism about the change is likely misguided.

It’s extremely unlikely that changes in SEC leadership will have any impact on the Ripple case.

SEC action against Ripple will move forward independently of Jay Clayton

Furthermore, Chervinsky suggested that the vote to file the lawsuit against Ripple by the SEC’s four commissioners was unanimous. Notably, he pointed out that the usually vocal Commissioner Hester Peirce, also known as “Crypto Mom,” has remained silent since the lawsuit was filed.

Given Comm’r Peirce’s conspicuous silence, I’d guess the vote was unanimous in favor of filing. […]

To clarify the point re: Comm’r Peirce, she’s often vocal when she disagrees with her colleagues on enforcement (e.g., Kik, Unikrn). That she hasn’t commented may suggest she approved. OTOH, it may be inappropriate to speak up while charges are pending, so it might mean nothing.

“Regardless, the case is being prosecuted by enforcement lawyers who are here to stay,” Compound’s general counsel further explained. Still, Hester Peirce is the only one who has shown interest in not voting for crypto-enforcement measures in other crypto-related cases, he said.

“You’ll struggle to find “no” votes other than hers,” Chervinsky stated. Even without Jay Clayton, he said, the majority of commissioners have still voted in favor of every action the Enforcement Division has proposed. Therefore, there is no reason to believe he was a swing vote on this issue.

Moreover, regardless of Clayton’s personnel, he said, it is unlikely that a case would simply be abandoned:

Anyway, it’d be a real shock for the SEC to bring a case & then abandon it weeks later. […] Jay Clayton’s name isn’t on the complaint. This comes from other high-ranking officials (Richard Best, Jorge Tenreiro, etc.) & their team, who are surely committed to it.

Coinbase and OKCoin suspend trading XRP

As a result of the SEC lawsuit, the bad news for Ripple are not abating at the moment. Having already hinted at it last week, Coinbase yesterday announced the temporary suspension of XRP trading. The largest American exchange already switched XRP trading to “limit only” yesterday, starting December 28, 2020, at 2:30 PM PST. Trading will be fully suspended on Tuesday, January 19, 2021, at 10 AM PST.

Coinbase also announced that the trading suspension will have no impact on customers’ access to XRP wallets, which will continue to be available for deposits and withdrawals after the trading suspension. In addition, customers will continue to be eligible for the previously announced Spark airdrop. Moreover, XRP will continue to be supported on Coinbase Custody.

Another prominent exchange following Coinbase, Bitstamp, Coinmama and numerous other exchanges worldwide with the trading halt for XRP is OKCoin. The exchange also announced yesterday that it will suspend trading and deposits for XRP. OKCoin will suspend spot trading, margin trading and deposits starting January 04 (7pm PST) until further notice.

The XRP price is currently suffering massively from the bad news, posting another 18% loss over the last 24 hours. Over the last 7 days, it is down 51%, with XRP trading at $0.227 at the time of writing.

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