Both parties have requested Judge Torres, presiding over the continuing Ripple-SEC dispute, for a decision in their favor without a trial. After a thorough briefing on both motions for summary judgment, the decision is currently expected.
Ripple Lawsuit Ruling Looms, Here Are New Expectations in Wake of FTX Collapse
Following the FTX exchange’s insolvency in November, clients and investors were exposed to the possibility of billions of dollars in losses. Sam Bankman-Fried, the creator of FTX, cultivated close ties with American legislators before his arrest and backed legislation that would have given the Commodity Futures Trading Commission (CFTC) authority over some coins.
Some saw this as an effort to usurp the Securities and Exchange Commission’s authority. In the wake of the demise of the cryptocurrency exchange FTX, one crucial issue remains: Who should govern the sector?
The outcome of the Ripple litigation, according to many, might determine the answer and the future of numerous cryptocurrency investors and businesses. The main issue in the lawsuit is whether XRP should be considered a security, in which case the Securities and Exchange Commission would have jurisdiction over it.
According to Ripple CEO Brad Garlinghouse and General Counsel Stuart Alderoty, a ruling in the litigation is anticipated in the first half of 2023. James K. Filan claims the decision could be made as soon as March 2023. Stuart Alderoty believes that the choice, whenever it is made, will significantly affect the development of cryptocurrencies in the United States.
An upcoming ruling could help determine the answer to an urgent question: Who should regulate the crypto industry? https://t.co/bpH97Hh7QH
— Bloomberg Crypto (@crypto) January 18, 2023
Bloomberg reports the opinion of some observers. “The recent turmoil in crypto markets could taint the court’s view,” said Joseph Hall, a partner at Davis Polk & Wardwell, who worked at the SEC from 2003 to 2005. “You just have to imagine that the judges will be influenced by the investor losses they’ve seen. And the SEC will make clear to them that if you rule the other way, we will not have the tools that we need to fight this kind of activity,” Hall added.
Even if Ripple wins, it might not be the ticker-tape celebration that cryptocurrency aficionados are hoping for, according to Andrew Stoltmann, a securities lawsuit attorney based in Chicago. “I anticipate Congress will come in over the top and basically decide who gets jurisdiction with respect to enforcement,” Stoltmann added.
Ripple CEO: XRP lawsuit resolved by June, SEC conduct ’embarrassing’
Brad Garlinghouse, CEO of Ripple, predicts that the company’s protracted legal battle with the Securities Exchange Commission (SEC) will be resolved in “single-digit months” and is still optimistic about obtaining a good decision.
During an interview with CNBC on January 18 at the World Economic Forum in Davos, Switzerland, Garlinghouse indicated that now that both sides have “completely filed and properly briefed” their arguments before the U.S. District Court, the decision might be made as early as June of this year:
“We expect a decision from a judge certainly in 2023. You don’t really have control over when a judge makes their decisions. But I’m optimistic that sometime in the coming single digit months we’ll have closure there.”
While Garlinghouse and investors are confident that Ripple will prevail in court given the circumstances, the CEO of Ripple also used the occasion to mock the SEC for its “embarrassing” conduct throughout the case, noting: “The SEC’s behavior in some of it has been embarrassing as a U.S. citizen. Just some of the things that have been happening, like you’ve got to be kidding.”
In addition, Garlinghouse claimed that the regulator had misled the firm by filing the action despite their efforts to meet with them three times in order to clarify regulatory matters: “Not once did they say to me we think XRP may be a security. So to later go back and say hey the whole time we thought XRP was a security we just didn’t tell you… that doesn’t feel like a genuine partnership between public sector and private sector.”
While noting that the outcome of the case also has huge implications for the cryptocurrency industry, Garlinghouse reiterated that Ripple would only settle if it was made clear that XRP is not a security. However, “the SEC and Gary Gensler has very outwardly said he views almost all crypto as a security” Garlinghouse said, “so that leaves very little space in the Venn diagram for settlement,” he added.
Garlinghouse said that some of the most crypto-friendly nations are putting together more “positive” regulation that doesn’t inhibit innovation, and the U.S. SEC should take heed.
He praised the United Arab Emirates, Japan, Singapore, Switzerland, and the United Kingdom among other nations.
The SEC filed the case in December 2020, alleging that Ripple sold its XRP coin as an unregistered securities without authorization.
Ripple has long challenged the assertion, saying that it doesn’t meet the Howey test’s definition of an investment contract.
If the parties are unable to come to an agreement, the District Court in New York will either issue a stand-alone decision or try the case in front of a jury.
Read more:
- Ripple Giant Has Moved Staggering Amount Of XRP, Here’s Where Crypto Was Transferred
- Ripple Lawyer John Deaton Says SEC’s Allegations Have Gone Too Far
- XRP Whale Has Taken Out $38 Million From Binance, Can This Be A Bullish Signal?
- The Lawsuit Between SEC And Ripple Looks Nearing Its Final Stages