A proposal on a new legislation put forward by US lawmaker, Don Beyer may be the remedy to the legal duel between Ripple and the US SEC as suggested. The proposed law entitled, ‘The Digital Asset Market Structure and Investor Protection Act’ is touted to brighten the gray areas concerning digital assets including cryptocurrencies. According to reports, Ripple, the parent firm of the XRP token could use the proposed law to its advantage as it continues its case with US regulators.
Don Beyer’s bill is said to be a spin-off of the US 1994 Securities Act, with few amendments to include cryptocurrencies. The US lawmaker noted that the US should embrace a regulatory framework for this asset class to encourage the emergence of new technologies in space. Beyer admitted that the US was old-fashioned in its laws, while also declaring that the bill he put forward would be a starting point to enable protections for holders and investors of cryptocurrencies.
Bill to Address Issues Surrounding Ripple’s Legal Battle
The legal spiel between Ripple and the US SEC has been ongoing since December 2020. Although Ripple has scored more points on the case than the latter, there seems to be no end to the case. However, Beyer’s proposed bill has been suggested as a decider for the case. According to reports, the bill if passed will delineate the issues surrounding the lawsuit and tilt the presiding court’s judgement in favor of Ripple.
US attorney, Jeremy Hogan is of the opinion that a resolution may surface by September. He also stated the implications the proposed legislation would have on Ripple’s case. Ripple is embroiled in a $1.3 billion unregistered securities case with the Securities Commission. Despite this, the XRP token remains unaffected, only succumbing to the market decline in May after seeing a high of $2 in April.
Bills Define Digital Asset Securities
Notably, the bill clearly defines digital assets securities to mean digital assets that provide the holders and investors with equity or debt interest; rights to profits, interest, or dividends payments; voting rights in major corporate actions; and liquidation rights in the issuer. Moreover, it asserts that a digital asset is a security, even when the issuer’s platform is not fully developed and proceeds from the asset’s sales are committed towards improving services provided by the issuers, including its platform.
In light of the above definition, Ripple is touted to have a strong case against the US SEC as Ripple’s XRP does not possess the features of a digital asset security. Attorney Hogan, however, raised a strong point about the bill being retroactive such that it can apply to the lawsuit. If so, it would transfer jurisdiction over the XRP token from the US SEC to the Commodities and Exchange Commission.
Although the bill is yet to receive approval, upon its passage, Ripple may employ it as a trump card to wriggle itself out of the clutches of US regulators. On a larger scale, it would suffice as a defining moment for crypto regulations.