US regulatory clarity has begun in court after Ripple win: CFTC commissioner

Caroline Pham, one of five commissioner of the Commodities Futures Trading Commission, believes the path to United States crypto regulatory clarity has been laid out following Ripple’s partial victory.

Speaking on Bloomberg TV on July 17, Commissioner Pham said recent big court decisions regarding the classification of crypto assets will eventually lead to regulatory clarity. 

“You know, last year I said that we were going to see regulatory clarity first in the courts around the definition of a security, and I think we’ve seen that with some very big court opinions that have been released.”

Pham said that she was looking forward to participating in regulatory working groups and hoped other United States regulators, such as the Securities and Exchange Commission, would work together to come up with a “holistic approach” to crypto regulation. 

Pham’s comments come a few days after San Francisco fintech firm Ripple won a key partial victory in an ongoing court battle in which the SEC accused it of selling unregistered securities.

Judge Analisa Torres of the Southern District of New York ruled on July 14 that XRP (XRP) was not a security when sold to retail investors on digital asset exchanges.

Thank you @BloombergTV for the opportunity to talk about our important GMAC initiatives! Beyond crypto, institutional markets & central banks are looking at tokenization of real assets like bonds. Today, we heard about international, US & EU developments & key takeaways. https://t.co/cWTShDy2Bf

— Caroline D. Pham (@CarolineDPham) July 18, 2023

The ruling was not well received by SEC Chair Gary Gensler, who called it disappointing at a July 17 press conference. Gensler has previously suggested that every digital asset aside from Bitcoin is a security, though his agency has not gone as far as to say the same.

Despite this, Gensler has vowed to continue with enforcement actions following the recent Ripple triumph.

Related: Ripple court ruling makes call for regulation ‘more compelling and more urgent’ — former CFTC chair

Commissioner Pham also highlighted the importance of real-world asset (RWA) tokenization. She said there were “real opportunities” to modernize financial markets through the tokenization of money market funds on the blockchain.

Traditional finance companies have been increasing their engagement with real-world asset protocols, resulting in several RWAs outperforming DeFi assets recently.

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