- CFTC Commissioner Caroline Pham has expressed optimism for the development of a legal framework to govern the crypto industry.
- This comes against a backdrop of a partial win for Ripple; where the judge ruled that XRP sold on the exchanges platform was not a security.
- The Commissioner is optimistic that different players in the crypto industry will work together to come up with a “holistic approach” to crypto regulations.
The holistic approach to crypto regulations has started to take shape. Caroline Pham, one of the five commissioners of the Commodities Futures Trading Commission strongly believes following Ripple’s partial victory against U.S. Securities Exchange Commission.
Commissioner Pham was speaking on Bloomberg TV on July 17, where she firmly believes that recent big court decisions on the classification of securities will bring clarity to the sector.
Ripple has recently won a partial battle with the Securities Exchange Commission (SEC), where the regulator had accused it of selling unregistered securities. Judge Analisa Torres of the Southern District of New York ruled on July 14 that XRP was not a security when sold on public cryptocurrency exchanges, because purchasers did not have a reasonable expectation of profit tied to Ripple’s efforts. She further added that the buyers could not have been aware whether their money went to Ripples or other sellers on the platform.
Public Sale of XRP On Crypto Exchanges is Not Illegal
The Judge ruled that Ripple Lab Inc did not violate federal securities law by selling its XRP on public exchanges. This was a piece of great news for the cryptocurrency company, marking the first win in that sector for a case brought by SEC. However, the U.S. Regulator also registered a partial victory, because Judge Torres found that Ripple’s $728.9 million of XRP sales to hedge funds and other sophisticated investors amounted to unregistered sales of securities.
Commenting after Ripple’s victory, Commissioner Pham said that she had predicted that the courts would clarify the definition of securities, and she now adds that the courts have clearly pronounced themselves and this should guide regulators in defining legislation in the crypto sector.
Pham’s said she was looking forward to participating in regulatory working groups, and she expressed optimism that other regulators like SEC will also follow suit so that they could come up with a holistic approach to crypto regulations.
New Opportunities for Traditional Finance Companies
Commissioner Pham further stated that there were real opportunities to modernise financial markets through the tokenization of money market funds on the blockchain. She highlighted the importance of real-world asset (RWA) tokenization. Traditional finance companies are already increasing their engagements with real-world asset protocol, which has made several RWAs outperform DeFi assets.
The Torres ruling has not been well received by SEC Chair Gary Gensler, who personally believes that every digital asset apart from Bitcoin, is a security. However, for crypto investors, this could not have come at a better time as they laugh all the way to the bank. Ripple’s XRP token surged as high as 71% after the ruling of Judge Torres as investors in other cryptocurrencies such as altcoins registered optimism that theirs may not be considered securities as well.
According to CNBC News, Ripple’s win had a ripple effect on other cryptocurrencies;
Polygon’s matic token gained 17.82%. Litecoin and the Solana jumped 18.35%, and Cardano’s token advanced 20.31%. Bitcoin rose more than 4%, while ether rose 6%.
