Ripple XRP Case: One significant legal battle that has the potential to elevate cryptocurrency to a new level of attention and clarify regulations pertaining to it is the one involving Ripple Labs and the U.S. Securities and Exchange Commission (SEC). Recent setbacks for the SEC include the filing of civil lawsuits against two Ripple executives, Christian Larsen and Brad Garlinghouse.
The CEO of Ripple Garlinghouse disclosed that the company has spent more than $200 million to fight the SEC’s overreach. XRP holders are currently awaiting the judge’s ruling on requests for final judgment in the remedies phase.
Lawyers’ Opinions on Settlement, Appeal, Timeline for Final Ruling, and More
The legal community, which includes former SEC lawyers, has examined possible next steps in the US SEC v. Ripple Labs litigation. At the same time, the cryptocurrency community awaits a final ruling on $2 billion in fines.
Prospective Settlement Attorneys
Former SEC attorneys Marc Fagel and James Farrell are among those who think a settlement between the SEC and Ripple is still possible. The litigation may still be resolved, but Jeremy Hogan, a partner at the legal firm Hogan & Hogan, noted that it is unlikely, given Ripple’s recent victories.
Yes, it could still be settled before the final judgment but very unlikely.
— Jeremy Hogan (@attorneyjeremy1) June 26, 2024
The SEC is requesting access to sealed files to make a decision regarding Ripple’s current assets (related to the penalty amount), the volume of recent sales (relevant to injunctive relief and fines), revenues and expenses (relevant to disgorgement), and the extent of discounts to certain institutional investors (relevant to investor injury). The SEC’s position that prior contracts are still relevant to the company has drawn criticism from Ripple Labs.
Appeal Against the Summary Judgement of Judge Torres
The SEC has little chance of appealing Judge Torres’ summary ruling that, by the Howey Test, XRP is not a security in and of itself. Remarks made by Kristina Littman, the former chief of SEC’s Crypto Enforcement division, caused a stir in the industry because she suggested the SEC might not file an appeal against Judge Torres’ ruling on XRP. “The SEC may decide not to risk taking the Ripple opinion to the Circuit level and instead just let it remain there as a District Court opinion.”
Judge Torres’ decision regarding XRP programmatic sales gained support when the Second Circuit Court previously decided in Coinbase’s favour, holding that cryptocurrency secondary trades are not securities. Paul Grewal, Coinbase’s CLO, revealed the significant victory for the cryptocurrency sector on X.
According to attorney James Murphy, aka MetaLawMan, the tokens included in the Coinbase complaint are not securities.
President of Empower Oversight Tristan Leavitt said many of the SEC’s “no relevant records” statements seem incredibly shady. A fresh FOIA request is needed to pressure the SEC to provide more records.
Date of Final Decision
“Netburn and Torres can confer and determine that the issue before Netburn (the SEC’s “additional expert”) does not need to be ruled upon,” attorneys Fred Rispoli and others claimed. Judge Torres may rule without consulting the expert witness to make a definitive decision regarding remedies and an injunction if Ripple wins.
Attorneys argued that the final decision would probably be made 60 to 90 days after the last brief, which would be far faster than the summary judgment. Due to recent events, including the election year’s delays, the XRP community must wait until August or September to hear Judge Torres’ final decision.
In addition, disputes not covered by the judges in the decision may be resolved by the US SEC and Ripple.
