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1 year ago
3
ARTICLE AD BOX
- Global investment giant BlackRock opts out of launching a Ripple XRP ETF due to uncertain regulations and Ripple’s ongoing SEC lawsuit.
- Ripple CEO Brad Garlinghouse criticizes SEC Chair Gary Gensler, adding to tensions between the crypto industry and regulators.
BlackRock, one of the largest asset managers globally, has made it clear through statements from its senior officials that it is unlikely to support an XRP ETF. This ruling is significant, given the ongoing SEC v. Ripple dispute, which has captivated the XRP holding community.
BlackRock’s hesitation to enter the field of Ripple XRP ETFs can be ascribed to the ongoing legal struggle between the Securities and Exchange Commission (SEC) and Ripple Labs. While Judge Torres’ recent decision on selling XRP on exchange platforms stressed that the asset is not an “investment contract,” it remains in a regulatory gray area. This confusion has likely led BlackRock to avoid XRP ETFs due to a lack of clarity on whether XRP is a security.
Such regulatory ambiguity presents a significant problem to financial companies like BlackRock, which prioritize regulatory compliance and risk management. The uncertainty surrounding XRP’s legal status makes it a less appealing candidate for inclusion in an ETF. This is especially true compared to more established cryptocurrencies such as Bitcoin and Ethereum.
Tensions between the crypto industry and regulators have been rising. Ripple CEO Brad Garlinghouse has been vocal in his criticism of SEC Chair Gary Gensler, describing him as a “political liability” for the United States. Garlinghouse’s views underscore the widening gap between the crypto sector and regulators, emphasizing the regulatory influence on market dynamics and institutional decisions.
Legal Maneuvers in the SEC v. Ripple Lawsuit
Ripple’s legal team has resisted the SEC’s petition to compel the ongoing legal dispute between the two parties. This move, requesting information and facts concerning the lawsuit, particularly requested that Ripple release its financial statements for 2022-2023 and contracts governing XRP institutional sales. The SEC’s interest in post-complaint conduct, or actions conducted after the initial complaints were filed, raises concerns about Ripple’s compliance with securities laws during this time.
Ripple has responded to the SEC’s request, claiming that the regulator had ample chance to request post-complaint documents. This was during the fact-discovery phase of the litigation, which ended on August 31, 2021. This could result in fines from the presiding judge. Ripple asserts that the post-complaint conduct does not relate to the issue and should not serve as a basis for penalizing the payment remittance firm.
Cryptocurrency Market Impact and challenges in approving an XRP ETF
These legal and regulatory developments have posed challenges to the market price of XRP. XRP is currently trading at $0.515, down from the previous week, additionally, in the last 24-hours, XRP recorded a 24-hour decline of 2%. The cryptocurrency market is intently watching XRP’s performance as it deals with regulatory uncertainty and investment potential.
Legal expert Bill Morgan underlines the importance of SEC Chairman Gary Gensler in the approval process. Gensler, renowned for his cautious approach to cryptocurrencies, only voted to support the Bitcoin ETF following legal setbacks for the SEC. This tentative acceptance and opposing views within the SEC imply that the path to an XRP ETF is fraught with difficulties.
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