While the SEC ruling against Ripple could impact the way companies and lawmakers deal with cryptocurrencies, Timothy Massad, former chair of the US Commodity Futures Trading Commission (CFTC), said his call for regulatory clarity remains the same. same.
In a July 7 interview with The Wall Street Journal, Massad and former SEC president Jay Clayton Proposal The lawsuits filed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) against crypto firms are “unlikely to quickly improve investor protection and market integrity significantly.” The comments came before a federal judge in the SEC v. Ripple case issued a ruling that appears to be in favor of the blockchain company, by stating that the XRP token was not a security.
Speaking to Cointelegraph on July 17, Massaad argued that the court ruling did not necessarily limit the scope of the Howie test — the standard by which the SEC determines a security — because the judge stated that institutional investors “reasonably expected Ripple to use the capital it acquired.” of its sales to improve the XRP ecosystem and thus increase the price of XRP.” Regarding any potential issues involving Ripple’s holdings, the former CFTC chair said the SEC could consider appealing the judge’s decision, or lawmakers could step in.
“This clearly shows that we cannot create a regulatory framework for cryptocurrencies just through enforcement,” said the former CFTC head.
Massaad added that he believes it is unlikely that the number of enforcement cases filed by the SEC or CFTC will decrease even with a ruling that appears to take XRP out of its scope. He suggested that the two regulators work together to develop standards on crypto aimed at providing investor and market protection, either directly or through a self-regulatory organization.
Related: Former SEC official says Ripple’s decision is “disturbing on several fronts”
According to the former CFTC chair, the case could provide an impetus for some US lawmakers who were previously unwilling to consider legislation affecting space. Representatives on the House Financial Services Committee are currently considering a draft market structure bill, and Sens. Cynthia Loomis and Kirsten Gillibrand reintroduced legislation aimed at creating a comprehensive regulatory framework for digital assets on July 12.
“(The Ripple ruling) has made our argument more persuasive and compelling, which means we can’t just rely on implementation to get the kind of investor protection standards we need.”
Massad served as Chairman of the CFTC from 2014 to 2017 under US President Barack Obama. He has previously spoken out in favor of regulators approving a Bitcoin (BTC) spot exchange fund, launching a central bank digital currency for payments in the United States, and regulatory clarity as the crypto space continues to grow.
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