- The long-running debate over whether XRP is a security could last until 2023. However, the corporation and crypto supporters are more bullish.
- The SEC surprised the technology industry by suing Ripple, launching off what has been the most keenly watched court battle in crypto.
- The dispute, which began in December 2020, revolves around the SEC’s claim that Ripple failed to register around $1.4 billion in XRP as securities.
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The case has turned into a lengthy struggle, with the future of crypto regulation potentially on the line. The long-running legal dispute between United States Securities and Exchange Commission (SEC) and Ripple Labs Inc is all set to come to an end. While the judgment date remains undecided, XRP prices have witnessed a sudden hike. Consequently, experts and investors are anticipating that the case will reach its conclusion in the coming weeks.
It is noteworthy to mention that the proponents believe that Ripple might emerge victorious at the end of the legal battle.
Legal battle drawing closer to the summary judgment decision
The question of when the legal conflict between SEC vs. Ripple will come to an end has been lingering for over months now. However, the current scenario has given us a positive indication that we are nearing the summary judgment decision.
The latest tweet by the Attorney John E. Deaton, who is representing the XRP community as amicus in the court, believes that the conclusion of the case might come out soon. His tweet revealed that Judge Torres might not cause any further delays in drawing the summary judgment decision, following the recent developments.
Attorney Fred Rispoli agrees with Deaton’s opinions and believes that the summary judgment is imminent. However, Rispoli also highlighted that the judge could grant partial victories to both the parties after a brief analysis of the daubert motion. This means neither of the two parties will win a full summary judgment.
Is it a win for Ripple?
According to the latest developments on the ZyCrypto, there have been new positive developments in the court in favor of Ripple. In his latest interview conducted on March 8, Deaton discussed that Ripple had ten expert testimonies while SEC had only five.
The recent reports also reveal that the judge partially granted and rejected both parties’ motions to exclude expert evidence in her Daubert motion decision. It was also highlighted The SEC claimed that XRP holders bought the token with a realistic expectation of profits relying on Ripple’s efforts, but Judge Torres overturned all those claims.
It is worth mentioning that former Attorney Scott Chamberlain also published his key takeaways from the above developments on Twitter and emphasized that the exclusion of an expert witness might prove “fatal to SEC”.
A comprehensive timeline of the Ripple Vs. SEC case
Here’s a look at the former developments and turning points of the Ripple Vs. SEC legal conflict:
Dec 21, 2020: The SEC lodged a legal complaint against two Ripple officials and the company itself. Garlinghouse didn’t comply with the SEC regulations and requisites and chose to defend itself in the XRP lawsuit.
Dec 23, 2020: Coinbase declared that it will be delisting XRP tokens from its exchange.
March 3, 2021: Larsen and Garlinghouse wrote letters to the US District Court Southern District of New York Magistrate, debating that the SEC didn’t provide a fair notice.
March 8, 2021: SEC demanded an immediate hearing.
March 22, 2021: Judge Netburn explained to the SEC that XRP tokens were equivalent to the currency value and utility. They were different from BTC AND ETC.
April 13, 2021: SEC Commissioner published a Token Safe Harbor Proposal 2.0 to provide a three-year grace time period for developers to gain an insight about their involvement in the decentralized networks, regarding the exemption from the securities regulations.
June 14, 2021: SEC was given an extension until August 31, 2021 by the court to disclose its internal crypto trading policies.
August 31, 2021: SEC had to unveil its internal crypto trading policies.
January 24, 2022: Judge Netburn granted the SEC a deadline until Feb 17 to appeal their former decision regarding the Ripple Labs provided certain sensitive government documents in the SEC’s lawsuit that accused XRP coin is an unregistered security.
SEC is not being transparent
The SEC, which sued Ripple in 2020 for failing to register $1.4 billion worth of XRP as securities, has refused to release emails related to a 2018 speech by former director William Hinman in which he argued the ether cryptocurrency was not a security. The speech sparked a rally in ether’s price and was interpreted as an endorsement of the industry’s view that cryptocurrencies are not securities.
A federal judge ordered the SEC to produce drafts of the speech and related correspondence, which Ripple claims could offer further light on the agency’s cryptocurrency deliberations.
However, the SEC argued in a letter to the judge on Wednesday that the emails were covered by “attorney-client” privilege since Hinman “communicated with the SEC employees to acquire their legal advice.”
“Whether offers and sales of ether constitute securities transactions,” the SEC stated, “is undeniably a legal question.”
Ripple said in a May 13 court statement that Hinman, who left the SEC’s Division of Corporate Finance in late 2020, “was not a ‘client’ of the SEC’s lawyers for purposes of his outside personal activities.” The SEC maintained in its letter that Hinman gave the lecture in his capacity as a senior SEC executive, not in his “personal capacity.”
It is difficult to forecast who will win the case as both the parties apparently have a pinch of success in their own way. However, investors and experts have been closely following the case as the conclusion has wide-ranging impacts. The outcome of the case could be a major turning point for the entire crypto industry.
The final ruling could decide whether XRP was a security or not. It could also determine which digital assets are considered as securities in the United States of America. Another broader implication of the ruling would be that the SEC might influence the regulations of the crypto industry, bringing them under its regulatory wing. A win against Ripple might be the first step to achieve its long-term target. However, a victory for Ripple in their lawsuit could strengthen XRP’s position in the US market which would positively impact its price.
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