Expert Predicts Impact of Biden's Crypto Policy

James “MetaLawMan” Murphy, founder and chairman of Murphy & McGonigle, shared his expert view on how President Joe Biden’s recent policy changes might affect the legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC). He discussed these insights on X.

Under SEC Chair Gary Gensler, the commission has taken a strict stance on cryptocurrency, focusing on investor protection through rigorous enforcement. Murphy, however, suggests that political changes, especially with upcoming elections, might bring new leadership to the SEC, potentially altering its approach. This raises the question: Can Ripple benefit from Biden’s softer stance on crypto?

Murphy doubts the wisdom of settling with the SEC under its current leadership. On X, he advised, “I wouldn’t settle any crypto case with the current SEC before seeing how the election turns out.” He mentioned that new leadership, possibly someone like Hester Peirce, known as ‘Crypto Mom’ for her progressive views on crypto, could lead to voluntary dismissals of non-fraud crypto cases initiated by Gensler’s regime.

Biden’s administration has recently shown a softer approach towards cryptocurrencies, influenced by former President Donald Trump’s pro-Bitcoin stance. After Trump promised to protect crypto holders and keep adversaries like Elizabeth Warren away, Biden’s administration approved a spot Ethereum ETF, a significant step given past hesitations over market volatility and investor protection.

When questioned about the Ripple case, Murphy emphasized the independence of judicial proceedings from administrative changes. “The recent softening of the Biden admin’s stance on crypto should not affect Judge Torres’s ruling,” he said. However, he noted that this might influence the SEC’s position in settlement negotiations, suggesting, “It might impact the negotiating position of the SEC—if there are any settlement discussions.”

Discussions on X also considered Ripple’s strategy. One user suggested that settling might be wise given future uncertainties, saying, “I think it is smart for Ripple to settle if they get the opportunity. You never know who wins the next election. A devil you know is better than a devil you don’t know.” Murphy acknowledged this cautious approach but remained neutral, stating, “I don’t have any opinion on what Ripple should or shouldn’t do.”

Murphy’s analysis highlights the complex relationship between regulatory actions and political changes. The SEC’s current hardline approach under Gensler focuses on strict enforcement to protect investors. However, potential changes in leadership after the elections introduce uncertainty. Figures like Hester Peirce could lead to a more open-minded approach to crypto regulation, possibly affecting how the SEC handles crypto cases.

Biden’s administration’s recent actions, such as the approval of a spot Ethereum ETF, indicate a shift towards a more favorable view of cryptocurrencies. This move responds to political pressures and the evolving digital asset landscape. Murphy’s insights emphasize the importance of these developments for ongoing legal battles like the one between Ripple and the SEC.

In conclusion, the changing political and regulatory environment under Biden’s administration could significantly influence the SEC’s approach to cryptocurrencies. Murphy suggests that while judicial proceedings remain independent, the broader political climate could affect the SEC’s stance in settlement talks. Ripple must consider these potential shifts, balancing risks and opportunities in an uncertain future.