Ripple shares sold out ahead of key events in XRP lawsuit

Rick Steves

The court case could make XRP the only crypto asset with regulatory clarity in the United States.

Linqto, a private investment platform, is sold out of Ripple shares, said Nick Burrafato, Director of Digital Assets. Demand for Ripple Labs Inc. equity has been notably high in recent weeks as developments in the XRP lawsuit could give Ripple the upper hand against the SEC.

Ripple also showed signs of optimism, having bought back shares it issued after securing $200 million in a Series C funding round led by Tetragon, with participation from SBI Holdings and Route 66 Ventures.

The fundraiser of late 2019 valued Ripple at $10 billion, but the company bought the shares back at a $15 billion valuation, thus offering a 50% profit. The move also helped the firm to take back equity from Tetragon, who sued Ripple for $175 million after the SEC filed the infamous lawsuit.

What is coming?

The schedule in the SEC v. Ripple lawsuit is about to offer key reveals for the future of Ripple, XRP, and the cryptocurrency space.

The deadline to unseal Ripple’s memos publicly is February 17th, 2022. The same day, the SEC will file its motion for partial reconsideration over Judge Sarah Netburn’s DPP ruling, which will not be fully briefed until February 25, 2022. Ripple as one week to respond to that motion.

On top of that, Ripple wants the SEC to hand over the notes from the meeting between Brad Garlinghouse and ex-SEC Commissioner Elad Roisman. The agency claims it didn’t even know of its existence but it also says it is protected by DPP. A “Hail Marry”, according to Jeremy Hogan, Partner at Hogan & Hogan P.A.

What to expect?

As to Ripple’s memos, it could be said that the two exhibits fail to prove that and its executives were selling and marketing XRP as an investment contract within the SEC’s jurisdiction. See article 1 and article 2 on the matter.

In regard to the SEC’s deliberative process privilege, the plaintiff is expected to drag the issue as much as possible, but the court is likely to side with Ripple on that. The concern is that the SEC could be able to delay the production for months, but when it finally does, Ripple might uncover enough material to end the lawsuit quickly. See article 3 and article 4 on the matter.

The most recent play by Ripple was the motion to compel the production of the “Estabrook Notes” regarding a 2018 meeting between Brad Garlinghouse and former SEC Commissioner Roisman.

The notes, which are unlikely to be protected by DPP, may prove useful to the fair notice argument as Roisman is known to be a critic of the SEC’s enforcement practice in the blockchain space. See article 5 on the matter.

Also in regard to the survival of the fair notice defense, Ripple filed a sur-reply showing that the 75 cryptocurrency enforcement actions support Ripple’s argument, not the SEC’s.

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