- The SEC’s settlement with Plutus Lendings over its Abra Earn product represented another notional victory for the agency
- The agency has now compiled numerous victories and settlements since Ripple’s initial win against it, strengthening its position for the appeal
- These recent successes have raised questions about whether the tide has turned against the crypto sector and if the SEC will win its appeal
This week, the US Securities and Exchange Commission (SEC) settled with Plutus Lendings over its Abra Earn product, allowing it to notch up yet another ‘victory’ in its campaign to prove that cryptocurrencies are securities. In the year since Ripple won its decisive battle against the agency over the classification of its XRP token, the SEC has put together a catalogue of victories and settlements, allowing it to potentially bring a veritable arsenal to bear for its appeal. With so many wins suddenly under its belt, is the tide turning against the crypto sector in its battle with the authorities?
SEC Has Been Silently Chalking Up Victories
Ripple’s win against the SEC last July seemed like a watershed moment; the SEC had contended that Ripple’s XRP tokens were securities, but Judge Analise Torres of the United States District Court for the Southern District of New York ruled that “XRP, as a digital token, is not in and of itself a “contract, transaction[,] or scheme” that embodies the Howey requirements of an investment contract.”
The SEC appealed the case, and since then, many authoritative voices have stated their belief that the SEC would win the case on appeal. In the months since Ripple’s victory, the SEC has not stood still, issuing Wells notices, filing and winning lawsuits, and agreeing settlements with crypto companies including Shapeshift, Terraform Labs, Titan Global, Nexo, and Bittrex.
In all these cases, the SEC contended that the cryptocurrencies either operated or sold by those entities are securities, and in each case, the SEC was not overruled. The only company to try and fight in recent years has been LBRY, which lost its case last July.
Is Ripple’s Victory Under Threat?
What do these wins mean for the agency’s case against Ripple? It can’t be denied that the SEC’s recent string of wins strengthens its position on appeal, potentially leading to a more stringent interpretation of what constitutes a security in the crypto realm.
The agency will go into bat with a bevvy of precedents now under its arm and with many more still in the pipeline. It remains to be seen whether Ripple’s arguments will withstand this catalogue of new ‘evidence’ the SEC can bring to bear, but the wind is certainly starting to blow in a different direction than it was this time last year.
