Cryptocurrency market enthusiasts are on edge after the U.S. Securities and Exchange Commission (SEC) suffered another legal defeat.
In this case, the judge rejected the company’s efforts to regulate their cybersecurity, a decision that was applauded by critics. One vocal critic was James Murphy, known as X’s MetaLawMan, who directly criticized SEC Chairman Gary Gensler. Importantly, this comes amid an ongoing legal battle over XRP, which has led to increased scrutiny of the SEC’s actions.
SEC faces another defeat in court as XRP lawsuit continues
The crypto community is reacting to another loss for the U.S. Securities and Exchange Commission in the ongoing XRP case. For reference, the U.S. Securities and Exchange Commission (SEC) recently suffered a major setback in its legal battle with SolarWinds. A federal judge rejected the SEC’s efforts to regulate companies’ cybersecurity practices, but according to Coingape, the decision has significant ramifications.
The SEC argued that it should oversee all of a public company’s internal controls, including its cybersecurity protocols, but U.S. District Judge Paul A. Engelmeyer rejected the argument, saying it would give the SEC broad regulatory powers.
Judge Engelmeyer’s opinion emphasized that the SEC’s justification was too great. Users pointed out that if the SEC’s reasons were accepted, it would give the SEC the power to oversee background checks, padlocks on storage areas, safety protocols at water parks, and password settings. The judge’s opinion emphasized the need to limit the SEC’s jurisdiction to financial regulation and not interfere with internal safeguards at all.
Many organizations are concerned about the impact of the regulation following the ruling’s easing of cyberattack laws, which stemmed from the 2020 SolarWinds cyberattack, in which Russian hackers broke into the company’s software and gained unauthorized access to federal agencies and prominent technology companies.
The judge also dismissed the Securities and Exchange Commission’s allegations that SolarWinds unlawfully disclosed the scope of the infringement.
Ripple Community Reaction
The SEC’s latest setback has garnered significant attention from the Ripple community in light of the ongoing XRP litigation. James Murphy, a prominent lawyer and critic of the Securities and Exchange Commission (SEC), expressed his concerns about X. Murphy argued that the SEC’s repeated defeats will force Congress to reconsider allocating funds to Chairman Gary Gensler’s efforts to target U.S. companies.
Meanwhile, Murphy’s criticisms have resonated with other members of the XRP community, who have consistently questioned the SEC’s regulatory approach. There has been a lot of discussion surrounding the XRP case recently, with many speculating about a possible resolution or even a settlement.
However, some believe a settlement is unlikely, while others predict it will happen soon, with Ripple CEO Brad Garlinghouse expressing optimism that the lawsuit will be resolved soon, though he did not specify an exact timeline.
The protracted legal battle between Ripple and the SEC highlights the difficulties the SEC faces in implementing its regulatory goals. The SEC’s cybersecurity regulatory jurisdiction and methods are under scrutiny in light of the recent loss in the SolarWinds case. The ongoing XRP case has sparked debates about the SEC’s strategy and leadership, Gary Gensler emphasized.
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