A long fight between the SEC and Ripple is progressing, as far as we can tell, and the results may have a big impact on the crypto sector.
In the wake of major crypto market setbacks, some crypto companies are in ruins under the strain of liquidity demand. The industry needs a spark of hope and Ripple could be the one that brightens the mood.
On Dec. 2, Ripple Labs, the company behind XRP, submitted its “Redacted Reply” to SEC’s opposition.
The lawsuit’s plaintiff, the U.S. Securities and Exchange Commission also sent a redacted document to the court. The case is expected to reach a settlement on Dec. 9.
Ripple Won’t Back Down
Ripple asked the court to grant a summary judgment in its favor, noting in its public brief that the allegation that XRP was an unregistered security is unproven.
The party’s conclusion suggested the court should settle the case in Ripple’s favor and refute SEC’s claims.
Stuart Alderoty, General Counsel at Ripple made stated:
“This is our final submission where we ask the court to grant judgment in our favor. After two long years, Ripple is proud of the defense we’ve mounted on behalf of the entire crypto industry. We have always played it straight with the Court. Can’t say the same for our adversary.”
SEC has a strong belief that XRP was sold as a security through an ICO, starting in 2013.
The argument led to a tedious legal battle between the federal agency and the crypto business. To determine whether a cryptocurrency is a security or not, the SEC needs to conduct the Howey test.
According to the documentation provided by Ripple, the federal agency was unable to match XRP with any of the three key components in the test. To put it another way, there is no solid evidence to suggest that XRP was sold in the market as a security.
Very Shaky Regulations
The community’s confidence in a favorable resolution to the legal dispute has been bolstered as a result of Alderoty’s statement regarding Ripple’s summary judgment filing.
Despite the fact that there is still a chance that SEC will prevail, the majority of members cast their votes in favor of Ripple. However, others are more cautious about excessively tightening regulations.
David Gokhshtein, an entrepreneur who ran for Congress in the United States in the past, has a positive outlook on the prospect of Ripple winning. The founder of Gokhshtein Media stated that if Ripple is successful, then the entire cryptocurrency industry is successful as well.
The final call regarding the Ripple case will be made by Judge Analisa Torres of the United States District Court for the Southern District of New York.
In an earlier article, James Filan, a former federal prosecutor, pointed out that there are still three issues to be resolved in this fight.
The attorney is confident that Judge Torres will find a solution to all three of these significant problems, and he anticipates that a significant decision will be made before the first quarter of 2023 comes to a close.
A Big Bump Coming?
At the time of writing, the price of XRP had risen slightly, presumably due to widespread optimism. Both Ripple and the SEC are hoping for a resolution to their protracted legal battle.
According to recent documents, the upcoming trial is putting both parties’ patience to the test. Many theories have been proposed in relation to the Ripple-SEC case. But it’s still too early to draw any conclusions, even if the majority of points are now in favor of XRP.
Ripple CEO Brad Garlinghouse stated that the company had spent more than $100 million in legal fees to defend itself against the SEC. This is a matter that the CEO believes is critical not only for Ripple but also for the entire crypto sector.
Many crypto experts believe that if Ripple wins, it will be a big win for crypto and will set a precedent for future cases.
However, if it loses, the legal grounds will most likely be expanded, and similar projects may face similar challenges in the future.
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Author: Nicholas Say