Top Legal Analyst Highlights How Ripple Case Will Influence Coinbase and Binance Lawsuits

MetaLawMan says the Ripple lawsuit’s outcome will impact the SEC’s legal cases against Binance and Coinbase.

A prominent crypto-friendly legal analyst who goes by the pseudonym MetaLawMan has taken to Twitter to explain how the SEC vs. Ripple ruling would play a significant role in the commission’s case against Binance and Coinbase.

In a tweet yesterday, MetaLawMan noted that the stakes are increasing in the Ripple case, especially in the legal battle involving two of the world’s largest crypto exchanges- Binance and Coinbase.

1/ The stakes just keep getting higher for the ruling in SEC v. @Ripple.

Here's why.

If Judge Torres rules that $XRP tokens trading on secondary markets are Not Securities–it would undermine the entire basis for the SEC's case against @Coinbase and much of the @Binance case.

— MetaLawMan (@MetaLawMan) June 8, 2023

For context, the SEC alleged that Coinbase operates an unregistered securities exchange by facilitating the trading of at least 13 crypto assets, which it labels as securities. MetaLawMan said the SEC has no case if the judge rules that these assets are not to securities.

He clarified that a ruling from Judge Torres is not a binding precedent. However, he expects the Judge in charge of the Coinbase lawsuit, Jennifer H. Rearden, to follow the legal reasoning of Judge Torres in determining whether the secondary market sales of the 13 cryptos are securities.

The prominent legal analyst pointed out that Rearden has only been Judge for six months compared to Judge Torres, who has been a Judge for several years. MetaLawMan also highlighted that Judge Rearden works in the same court in lower Manhattan as Judge Torres.

“So, while a Torres decision on $XRP would not be a ‘binding precedent,’ I do believe Judge Rearden will pay very close attention to Judge Torres’ legal reasoning in ruling whether $XRP is a security,” said MetaLawMan.

The legal analyst noted that if Judge Torres rules that XRP secondary market transactions are securities, the SEC would ask the Judges presiding over the Coinbase and Binance lawsuits to follow her legal reasoning.

Binance Case More Complicated Than Coinbase

Meanwhile, MetaLawMan thinks the Binance case is more complicated than Coinbase. This is mainly because Binance issued BNB coin, one of the assets SEC alleges to be a security in the lawsuit.

According to the analyst, the world’s largest crypto exchange will be hoping that Judge Torres rules that Ripple’s initial XRP sales do not qualify as security offerings.

While Judges within the same court sometimes disagree with each other’s ruling occasionally, MetaLawMan expects Judge Rearden to follow the legal reasoning of her experienced colleague-Judge Torres.

MetaLawMan says he expects to see years of appeals, irrespective of how the Binance and Coinbase rulings end.

SEC Claims XRP Secondary Sales Are Securities

It bears mentioning that many consider the SEC’s claims against Ripple to be broad, thus having the potential of implicating XRP trading on secondary markets.

In its legal battle against Ripple, the United States Securities and Exchange Commission failed to distinguish between investors who bought XRP directly from Ripple and those who acquired the crypto asset from secondary markets.

Following the broad nature of the SEC’s claims against Ripple, attorney John Deaton filed an amicus brief on behalf of thousands of XRP investors to thwart the SEC’s plans of labeling XRP secondary market sales as security.

Consequently, many expect Judge Torres to comment on whether XRP secondary market sales are securities in her forthcoming summary judgment decision.

According to MetaLawMan, the basis of the SEC’s case against Binance and Coinbase will be undermined if Judge Analisa Torres rules that XRP secondary market sales are not securities.