DOJ Classifies Crypto As Commodities; Will This Help Ripple’s Case?
A new development in the Ripple and SEC lawsuit indicates that the case is nearing its conclusion. The Department of Justice ruled that Cryptocurrencies are commodities rather than securities.
An Updated Classification Of Cryptocurrencies
The long-running legal war between the SEC and Rupple is nearing its conclusion, with all eyes on Judge Annalisa Torres, who is presiding over the case.
However, another area of focus emerged as the United States Department of Justice filed a complaint against Avraham Eisenberg for manipulating and draining funds from the Mango Market Decentralized Finance Platform.
According to reports, he was apprehended and arrested on Monday in Puerto Rico.
In the court case filing regarding the theft case, cryptocurrencies were treated as commodities rather than securities.
Bringing it home to the Ripple and XRP lawsuit, the U.S. Justice Department referred to the tokens involved in the Mango Market hack as commodities and not securities during the court filing; this could indicate a victory for Ripple.
The SEC action against Ripple may not stand since, according to the Department of Justice, they had referred to these cryptocurrency tokens as commodities rather than securities.
The native token of Ripple, XRP, has been deemed by the SEC to be an unregistered security, and SEC also claimed that the firm was aware of this and continued to trade with these tokens still.
With this new status of cryptocurrencies, it is feasible, nevertheless, that this allegation may not be sufficient to support the SEC claim in court.
But is it also possible to categorize XRP as a commodity based on the Justice Department’s words made during the Eisenberg filing? There is no clear answer to this query.
Criticisms To This New Classification
However, there have been criticisms concerning the designation of cryptocurrency as a commodity rather than a security. Some think this is a tactic to give Ripple the advantage over the SEC in this case.
Another key player in the DeFi industry stated that the government won’t take a fresh approach toward these tokens, regardless of this classification of cryptocurrencies as commodities rather than securities.
According to an attorney from Falcon Rappaport & Berkman LLP, these cryptocurrencies may have been classed as commodities since they are easier to prove as commodities rather than as securities.
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