SEC v. Ripple: When will the lawsuit end?

Rick Steves

Ripple Labs needs to close this legal chapter with the SEC as soon as possible.

SEC vs Ripple: When will the lawsuit end

Digital assets are the hottest topic within the finance industry and the Ripple lawsuit is regarded by many as an opportunity for more regulatory clarity in the space.

The Judge has recently pushed discovery back 60 days as requested by the Securities and Exchange Commission, with anxiety kicking in especially for the XRP community who count the days until it’s all over. The updated agenda, here.

Ninety-six percent of all SEC cases are settled before trial, of which 60% before litigation and 90% in discovery. This fact only serves as a guide for what is coming. Anything can happen.

The community siding with Ripple is eager for an end to the lawsuit and one of its most popular members, attorney Jeremy Hogan, has been sharing his predictions.

In May, Mr. Hogan said that if the SEC’s new Chair Gary Gensler pulled back from the lawsuit and instead work for more regulatory clarity, that would happen until the end of that month. That didn’t happen.

“If we go into June with no settlement then this lawsuit has been adopted and supported by Chairman Gensler for better or worse. If that is the case I predict no settlement until September at the earliest. If there is no settlement and we go to summary judgment or trial I predict…well, heck I don’t know – do I look like a mind reader?”, he added.

In early June, Mr. Hogan shared his view on what a settlement between the SEC and Ripple Labs would look like, including the potential damages for the XRP market.

Now that the Judge pushed discovery back 60 days, the lawsuit timeframes have changed and Jeremy Hogan has updated his predictions. “So, I go back to my initial idea that no settlement will happen until the close of discovery. Could it settle before then? Yes, I just don’t think it’s likely.”

“So, any settlement is likely to be after at least the close of fact discovery and that is now early September and even more likely to be after October 16.”

What if both parties don’t reach a deal? “Then I believe the two main issues will be decided by Judge Torres at the summary judgment”.

Motions must be filed within 30 days of the close of discovery and that should be November 16, but responses to motions and sur-replies could push any summary judgment to an unknown date in the future.

“I don’t see the case being decided at summary judgment until early 2022 – maybe January”, he concluded.

The two main issues mentioned above are Ripple’s fair notice defense and whether XRP is a security or not.

SEC v. Ripple: New trial lawyer settles discussion over settlement

Regarding the Fair Notice Defense, the SEC has recently warned the Court that a Ripple win would nullify the Howie Test – the benchmark that has come under scrutiny with the emergence of the digital asset class. Ripple has partnered with Rutgers Law School to push for reform.

A Ripple win on the Fair Notice could not only have a significant impact on Ripple and XRP but also on the crypto ecosystem as a whole and even partially defund the SEC.

On the nature of XRP, the SEC has been claiming the asset is a security due to its centralized nature. Ripple, on the other hand, has kept proposing new use cases for the ledger – which is a sign of utility.

In March, the Judge dropped a bombshell in the form of admitting to XRP’s utility, which contradicts the SEC’s security argument.

SEC Commissioner Hester Peirce, also known as “crypto mom”, has recently explained what is the SEC’s intention when filing a complaint against a firm for an unregistered securities offering.

“When we think about a cryptoasset as being a security what we’re doing is we’re saying it’s being sold as part of an investment contract. It doesn’t mean that the asset itself necessarily has to be a security. It means that it was being sold as a security.”

In the meantime, a new competitor led by ex-Paypal and Ripple staff has emerged: Algorand-powered Six Clovers.

This just goes to show how important is for Ripple to close this legal chapter with the SEC. The regulator, however, is able to use this sense of emergency as leverage.

Speaking of leverage, we reviewed the last crypto crash and the role of leverage or margin trading in market volatility, with an eye on Ripple’s XRP.

 

 

Read this next

Digital Assets

Bitcoin.com Wallet adds several ERC-20 tokens

The product expansion includes representatives of the DeFi world, the Metaverse, and the largest stablecoins.

Market News

Savvy Investors to Profit Whether the Stock Market Rebounds or Not

Equities have gone up enormously since the low. SP500 has gained 13.88% since June 17. In August, the indices drifted sideways. On Wall Street, veteran investors expect a move in either direction.

Industry News

Wall Street-backed MEMX obtains SEC approval for options trading platform

The company has raised more than $135 million in funding from 18 stock trading and investing heavyweights, including BlackRock, Citadel Securities, and Morgan Stanley.

Industry News

Amundi US launches ESG strategy that seeks to outperform S&P 500

Amundi’s Responsible investing team includes more than 45 specialists, and its ESG analysis covers more than 13,500 issuers across debt and equity.

Industry News

Verto launches embedded FX payments solution

The Verto API automates currency conversions, tracks payments and exchange rates in real-time, and is being launched in the follow-up of a $10 million in Series A funding last year.

Industry News

SEC awards over $16m to whistleblowers after another successful enforcement action

The program is 10 years-old and has arguably played a critical role in the Division of Enforcement’s ability to effectively detect wrongdoing, protect investors and the marketplace, and bring violators to justice.

Digital Assets

Ripple submits most succint explanation of Hinman issue in XRP lawsuit

It might be useful to get up to date as this could be the end of the road for the SEC.

Retail FX

TradingView integrates first Brazilian broker, Órama Investimentos

Órama offers all kinds of investment products, from fixed income to crypto-related funds.

Digital Assets

TRON approves Wintermute to mint, burn USDD stablecoin

TRON Reserve DAO has welcomed crypto market-making giant Wintermute as the ninth member and whitelisted institution to mint Tron network’s stablecoin, Decentralized USD (USDD).

<