4Sep 2023

SEC and Crypto

by David Angliss

The U.S. Securities and Exchange Commission (SEC) and the crypto asset industry have been engaged in intense regulatory enforcement and court proceedings for most of 2023. High-profile cases involving major players such as Ripple, Coinbase and Grayscale have injected a sense of uncertainty into the market, often resulting in a bearish outlook. However, recent developments have given the industry a fresh sense of positivity, as the SEC has struggled to win in the courtroom once the rule of law is fairly applied. Given the frequent inquiries we receive about the regulatory environment and the SEC’s influence on the cryptocurrency landscape, it is timely to provide an update on the ongoing legal disputes that are shaping the future of digital assets. In this article, we will dive into:


  • Grayscale’s win against the SEC;
  • XRP deemed not a security;
  • Coinbase lawsuit developments; and
  • Uniswap prevailed against a class action lawsuit.



In a pivotal ruling, a U.S. Circuit Court panel sided with Grayscale against the SEC, criticising the agency’s rejection of Grayscale’s Bitcoin spot ETF as “arbitrary and capricious.” The court’s decision has fueled optimism in financial markets and reignited debates about the benefits of a Bitcoin spot ETF, especially for retail investors. The ruling also highlighted the investor harm stemming from the discounted trading of Grayscale’s Bitcoin Trust, an issue that would be resolved by its conversion to a spot ETF. While the verdict doesn’t immediately greenlight an ETF, it compels the SEC to reevaluate its stance. The ruling could open the door for similar spot BTC ETFs, attracting significant capital into Bitcoin markets. All of the spot BTC ETF applications listed below are filed and are similar in nature. The approval of one ETF should release the floodgates on the rest, which could see large capital inflows into BTC.

Explainer: Understanding Grayscale’s Victory in Spot Bitcoin ETF Case.

Source: Bloomberg Intelligence,





The SEC’s lawsuit against Ripple, initiated in 2020, has been a crucial test case for crypto regulation. In July 2023, a court decision gave Ripple a partial victory, with Judge Torres ruling that XRP is not a security. Judge Torres found that Ripple’s public XRP sales were legal, but its institutional sales violated securities laws. The mixed ruling offers optimism for fairer crypto regulation and could serve as a precedent for future legal battles involving the SEC and other crypto entities. Apollo Crypto has not owned XRP, but sees the case as pivotal for the industry.


The SEC vs. Ripple lawsuit: Everything you Need to Know




Coinbase has asked a judge to dismiss the SEC’s lawsuit against it, arguing that the regulator is overstepping its jurisdiction. The SEC sued Coinbase for operating as an unregistered broker and exchange for cryptocurrencies, claiming they were securities. In response, Coinbase argues that the transactions on its platform are not investment contracts, but commodity sales. The company cites a recent ruling in the SEC’s case against Ripple as precedent, where a judge found Ripple’s sales on public exchanges were not securities transactions. Coinbase also contends that allegations against its staking and wallet services should be dismissed on similar grounds. Additionally, Coinbase invokes the “Major Questions Doctrine,” claiming that the SEC’s lawsuit would unduly broaden its regulatory reach into the cryptocurrency industry. The SEC has until October 3 to respond to Coinbase’s motion.

Ripple Labs’ partial win against the SEC has set a hopeful precedent for Coinbase’s own legal battle with the regulator. A victory for Coinbase could further empower legitimate crypto firms to engage with the SEC more confidently.


Coinbase Moves to Dismiss SEC Lawsuit, Alleging Crypto Falls Out of Regulator’s Oversight




A New York court dismissed a class action lawsuit against decentralised crypto exchange Uniswap, ruling that the platform was not responsible for scam tokens traded on it. The plaintiffs had alleged that Uniswap violated U.S. securities laws by allowing these tokens to be traded. Judge Katherine Polk Failla, who also oversees the SEC lawsuit against Coinbase, stated that the true defendants were the anonymous issuers of the scam tokens, not Uniswap. She also classified Ether (ETH) as a commodity, a designation the SEC has not yet made. 

The judge emphasised that due to the decentralised nature of Uniswap, the issuers of the scam tokens were “unknown and unknowable,” leaving no “identifiable defendant.” The court concluded that Congress, not the court should address such investor concerns. This ruling could influence future cases involving decentralised protocols and U.S. securities laws. 


U.S. Court Calls ETH a Commodity While Tossing Investor Suit Against Uniswap


While 2023 is a year that will be remembered by the SEC’s crackdown on the crypto asset industry, there have been very few remarkable wins for the SEC in a court setting. With the fair rule of law proving the SEC wrong, it is reasonable to assume that the SEC has significantly stifled innovation in the US. The destruction of asset prices due to their wide-sweeping enforcement has worked to achieve the exact opposite of their stated mission to protect investors.

David Angliss

David is an analyst at Apollo Crypto with five years of crypto-asset investing experience. He contributes to the investment team by researching crypto-assets across the innovative contract platform, DeFi assets and NFT and Metaverse infrastructure categories. David also assists with the day-to-day activities of market-neutral strategies by analysing yields, evaluating smart audits, and facilitating crypto-asset transactions.