There seems to be a glimmer of regulatory clarity in a cryptic case that has kept the crypto community on its toes. Judge Torres has given a nod to the Securities and Exchange Commission’s (SEC) leave to file an appeal in the ongoing case against Ripple. For those not well-versed with the law, an interlocutory appeal stands for the trial court’s decision being put to the test while the rest of the case marches on.
Following a ruling on July 13, Torres ruled that Ripple’s native token, XRP, did not qualify as a security in public sales. However, more institutional matters will regard XRP as a security. The allegations against Ripple, primarily involving an unregistered security offer, began in December 2020. Ripple chiefs, Brad Garlinghouse and Chris Larsen, are neck-deep in the case.
Springing 234 miles north in the same week, Coinbase announced the suspension of certain stablecoins—Tether (USDT), Dai (DAI), and RAI for its Canadian users beginning August 31, following its listing standards. Despite the oncoming trading prohibition, users will still be let in to deposit and withdraw the stablecoins.
This decision arrives on the heels of the single approved stablecoin by the Canadian Securities Administrators (CSA) – the USD Coin (USDC). Meanwhile, Dai carries the flag for being the between world of fiat and algorithmic stablecoin and RAI – a pure-blooded algorithmic stablecoin not pegged to any asset. Interestingly, in earlier actions, Crypto.com delisted USDT for Canadian users, followed by a no-explanation-given USDT ban by the Ontario Securities Commission.
While these fresh developments give a much-needed push towards regulation, it’s not devoid of skepticism. A fine balance must be struck to avoid choking innovation and maintaining investor protection. As previously seen, the unfavourable regulatory environment had forced crypto exchanges OKX and Binance to retreat from the Canadian market. Will this newfound regulatory rigour put the brakes on the growth of blockchain’s future, or is this merely a stepping stone towards a more secure crypto future? Only time will tell!