Coinbase Comes Out In Support Of Ripple Amid XRP vs. SEC Case

Coinbase, a leading crypto exchange in the United States, has come out in support of Ripple and filed a petition in a federal court requesting to submit a friend-of-the-court (amicus) brief in the XRP v. SEC case.

Coinbase believes the SEC did not provide any prior notice to Ripple, a U.S.-based payments firm that is behind the cryptocurrency XRP, before suing it in 2020 for violation of securities laws.

The crypto exchange stated that the SEC did not send a "fair notice" to Ripple prior to taking the enforcement action. It also pointed out that there was an absence of clear crypto-centric rules at the time.

"Given the absence of SEC rulemaking for the cryptocurrency industry, the question of whether the SEC has given fair notice before bringing an enforcement action against sales of one of the thousands of unique digital assets will often be highly fact-intensive, which makes it particularly ill-suited for adjudication on summary judgment," Coinbase said in the filing, as per CoinDesk.

Coinbase is the only firm that believes the SEC needs to be held accountable for the lack of regulations in the crypto space and has, therefore, joined the Blockchain Association, an industry lobbyist group, SpendTheBits, a crypto payments app that uses XRP and John Deaton, a lawyer, to support Ripple.

"Ripple and others have been the subject of extensive enforcement scrutiny while others — with nearly identical products or services — have apparently been subject to none," Coinbase added, possibly pointing to proof-of-stake (PoS) tokens like Ether (ETH).

The SEC and Commodity Futures Trading Commission (CFTC) haven't been able to decide which one will regulate Bitcoin (BTC) and Ether (ETH), which are considered commodities by CFTC Chair Rostin Behnam despite the latter's PoS transition.

Meanwhile, SEC Chair Gary Gensler believes that only Bitcoin can be classified as a commodity.

"Some, like Bitcoin, and that's the only one, Jim, I'm going to say because I'm not going to talk about any one of these tokens, my predecessors and others have said, they're a commodity," Gensler said in an interview with CNBC's Jim Cramer in June.