Here are three possible scenarios for Ripple with the SEC lawsuit, XRP could be ready to rebound
As AZCoin News reported, significant development has taken place over the past week or so, with the SEC’s efforts to block the deposition of former SEC Division of Corporation Finance Director William Hinman turning fruitless. And there are different possible outcomes for Ripple, most in favor of the blockchain giant.
Ripple – SEC lawsuit: The three outcomes Hinman’s deposition could have
The aforementioned deposition is slated for 27 July, with both parties reaching an agreement on the scope of the deposition too.
Attorney John E. Deaton and his view about Ripple – SEC lawsuit
In a recent podcast by attorney John E. Deaton, the principal representative of the group of XRP holders who want to intervene in the aforementioned case, emphasized how this deposition could be the turning point Ripple needs. In his opinion, this is the second of the two biggest victories in the case, the first of which was the discovery of the Ethereum and Bitcoin documents as they could aid the court in deciding the Howey factors.
In speeches from 2018, Hinman stated that BTC and ETH are not securities. While the SEC considers these statements unrelated to the current case, the defendants argue that they may provide insight into the SEC and Hinman’s views on cryptocurrencies in general and XRP in particular.
“If XRP is a functional equivalent to Bitcoin and Ether as far as decentralization and structure and all of that, it’s game over they win… This Hinman deposition allows them to walk him through it,” he explained.
He further expands on the various outcomes this deposition can have, most of which favor Ripple. The first would be that Hinman pleading a right to the 5th amendment, a development that would make him not liable to answer any questions that he doesn’t want to.
However, this could be against the former SEC director. Since the 5th plea in a civil action can indicate a degree of crime and the implication itself can be like an admission of guilt. That in and of itself could launch an inspector general investigation into all of this.
The second most likely outcome would be an SEC recommendation for an out-of-court settlement. Both documents that the SEC has failed to turn to cite privilege and Hinman’s removal could provide information useful to Ripple in future arguments.
However, Ripple does not have a lot of incentive to settle. The attorney added:
“There’s not a lot of incentive for Ripple to settle unless Ripple really gets what it wants right, and that would be a declaration that XRP itself today is not security it’s not an investment contract period, and then they accept some small fine and the SEC can claim that they got something out of this prosecution and they can fight another day.”
If the court rules in Ripple’s favor, it could set a precedent that could be used to safeguard any cryptocurrency the SEC decides to prosecute in the future.
The result could be if the SEC refuses to comply or file discovery documents and instructs Hinman not to respond during the removal process. This will result in the court issuing a conditional order to dismiss the prejudice case, and the SEC will be able to resume its regulatory activities against other cryptocurrencies.
Whatever the outcome of the dismissal and the lawsuit unfolds, it will be interesting to see how the crypto community deals.
At the moment, the XRP price is trading at $0.57, up nearly 10% in the past 24 hours. The reason is probably more due to the price increase with the market than from the improvement in the lawsuit with the SEC. Specifically, “The B Word” could become an important bullish catalyzer for the markets. However, one of its main participants, Elon Musk, has a wild card reputation.
XRP/USD 4-hour chart | Source: TradingView
After the most recent bloodbath that saw nearly $100 billion wiped from the entire cryptocurrency markets, XRP bulls may have found a fundamental reason to push prices back up, following a new development in Ripple’s lawsuit.
The ongoing legal case between Ripple and SEC took on a new development after Ripple’s legal team accused the agency of violating Section 17(b) of the Securities Act. The rule requires courts to take judicial notice of facts that are not subject to reasonable dispute and facts from sources that cannot be reasonably questioned.
While the filing is part of a motion to refute the SEC’s claims against Ripple executives Brad Garlinghouse and Chris Larsen, it looks like XRP could temporarily benefit from that.
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