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The U.S. Securities and Exchange Commission (SEC) has encountered another legal defeat, which has attracted the interest of cryptocurrency market aficionados.
On this occasion, a judge rejected their effort to control corporate cybersecurity, a decision praised by critics. One of the vociferous critics is James Murphy, known as MetaLawMan on X, who directly criticized SEC Chair Gary Gensler. Significantly, this occurs amidst the ongoing XRP legal dispute, heightening the examination of the SEC's conduct.
SEC Faces Another Courtroom Defeat Amid Ongoing XRP Lawsuit
The cryptocurrency community responds to another legal loss for the U.S. SEC in the continuing XRP litigation. To provide perspective, the U.S. Securities and Exchange Commission (SEC) recently suffered a substantial loss in its legal battle against SolarWinds. A federal judge dismissed the SEC's endeavor to regulate business cybersecurity measures, a decision that carries significant ramifications, as per Coingape.
The SEC contended that it should oversee all internal controls of publicly traded corporations, encompassing cybersecurity protocols. Nevertheless, U.S. District Judge Paul A. Engelmayer rejected this claim, asserting it would grant the SEC broad regulatory authority.
Judge Engelmayer's opinion emphasized the excessive extent of the SEC's justification. The user observed that if the SEC's reasoning is accepted, it would grant the agency the authority to oversee background checks, storage padlocks, water park safety protocols, and password setups. The judge's opinion underscored the need to confine the SEC's jurisdiction to financial regulations and exclude its reach over any internal protective measures.
Many organizations are worried about regulatory consequences after this verdict has eased cyberattacks. The case originated from a cyberattack in 2020 on SolarWinds, in which Russian hackers breached the company's software to gain unauthorized access to federal agencies and prominent technology companies.
In addition, the judge rejected the Securities and Exchange Commission's allegations that SolarWinds had unlawfully revealed the extent of the breach.
Ripple Community Reacts
The SEC's recent setback has drawn significant interest from the Ripple community, particularly in light of the ongoing XRP lawsuit. James Murphy, a renowned attorney and critic of the Securities and Exchange Commission (SEC), expressed his apprehensions regarding X. Murphy contended that the SEC's recurrent defeats should compel Congress to reassess the allocation of funds for Chair Gary Gensler's endeavors targeting American corporations.
Meanwhile, Murphy's critique strikes a chord with other members of the XRP community who have consistently raised doubts about the SEC's regulatory methodology. Recently, there has been significant discussion surrounding the XRP case, with many speculating on the probable resolution and the likelihood of a settlement.
Nevertheless, some individuals believe a settlement is improbable, although others foresee a prompt resolution. In addition, Ripple CEO Brad Garlinghouse has conveyed his optimism over the imminent resolution of the litigation, albeit without specifying a precise timeframe.
The protracted legal dispute between Ripple and the SEC underscores the difficulties faced by the SEC in implementing its regulatory objectives. The SEC's jurisdiction and methodology for regulating cybersecurity are being closely examined in light of the recent loss in the SolarWinds case. The ongoing XRP litigation has sparked debates on the SEC's strategies and leadership, emphasizing Gary Gensler.
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