Ripple’s SEC battle hinges on 1994 Revak ruling

The legal landscape for cryptocurrencies is witnessing a pivotal moment, with the Revak v. SEC Realty case from 1994 taking center stage. This historical case has gained renewed attention due to its potential impact on the ongoing legal challenges faced by Ripple Labs and Coinbase. 

Legal experts, including Paul Grewal from Coinbase and pro-crypto lawyer John Deaton, have underscored the significance of the Revak case’s interpretation of the Howey test. The ruling highlighted that not all connections between investor success and a promoter’s efforts constitute an investment contract. This distinction challenges the SEC’s broader application of the term, potentially influencing the ongoing disputes with Ripple and Coinbase.

Ripple’s fight against SEC’s allegations

In the case against Ripple Labs, the SEC has accused the firm of conducting unregistered securities transactions through XRP tokens. Ripple counters this by claiming that XRP is a currency, not a security. The relevance of the Revak case could bolster Ripple’s defense.

Ripple may find a solid legal footing by arguing that the relationship between XRP holders and Ripple doesn’t strictly fulfill the investment contract criteria as outlined in the Howey test. The outcome of this battle is highly anticipated, as it could bring much-needed clarity to the regulatory framework for cryptocurrencies.

Implications for Coinbase and the wider crypto market

This evolving legal interpretation has also influenced Coinbase’s legal struggles. While a federal judge allowed their lawsuit to proceed, the scope was significantly narrowed, marking a partial victory for Coinbase.

The outcomes of these cases are critical, not just for Ripple and Coinbase, but for the broader crypto industry. They stand to establish precedents that could define regulatory boundaries and responsibilities for crypto companies, shaping the future of cryptocurrency classification and regulation.

The post Ripple’s SEC battle hinges on 1994 Revak ruling first appeared on Coinfea.