With a tweet, James K. Filan, one of the defence attorneys for Ripple Labs in the two-year-long lawsuit against the SEC, which has Ripple on trial for allegedly selling securities without authorization, is demanding a verdict on the lawsuit.
The lawsuit between Ripple and SEC continues
The attorney cited a motion filed with New York District Judge Anna Torres seeking summary judgement in the matter.
— James K. Filan 🇺🇸🇮🇪 113k (beware of imposters) (@FilanLaw) September 12, 2022
Ripple‘s CEO, Brad Garlinghouse, also commented on Twitter that the SEC seems uninterested in compliance with the law, blinded by its desire to prevail and punish Ripple and the entire cryptocurrency world
Today’s filings make it clear the SEC isn’t interested in applying the law. They want to remake it all in an impermissible effort to expand their jurisdiction far beyond the authority granted to them by Congress. https://t.co/ooPPle3QjI
— Brad Garlinghouse (@bgarlinghouse) September 17, 2022
Ripple‘s CEO expresses his displeasure at what now appears to be a persecutory attitude on the part of the SEC toward his company. According to rumors, the US Securities and Exchange regulator has in turn filed a motion seeking Ripple‘s conviction on charges that it sold securities without having any authorization.
A few days ago the SEC had already filed a motion to cover up the identity of the witnesses it had brought before the judge for fear that they might face retaliation. In the lawsuit, the SEC led by Gary Gensler had called to testify companies such as Binance, which in turn had to undergo an investigation to its detriment also by the same SEC. For some time now, Chairman Gensler seems to have begun a sort of personal crusade against the world of cryptocurrencies, which he considers dangerous for investors because they also have no clear regulations, despite the fact that many of them are to be considered, in his opinion, as securities in their own right.
How the lawsuit against Ripple Labs originated
The SEC sued Ripple Labs, CEO Brad Garlinghouse and its president Chris Larsen in December 2020 on charges that they raised more than $1.3 billion by selling the XRP token in unregistered securities transactions. Ripple argued that the sales and trading of XRP did not meet the principles of the Howey Test (a particular 75-year-old US Supreme Court case that determines whether or not an asset can be considered security or not), and therefore were not to be considered securities and would not have broken any rules.
“According to the SEC, there can be an “investment contract” without any contract, without any rights granted to the purchaser, and without any obligations on the issuer,”
reads the motion filed by Ripple with the federal judge.
The SEC, however, has persisted in its excise by pursuing a lawsuit that has been dragging on for nearly two years, with no breakthrough by the prosecution; indeed, the latest court events seem to be all in Ripple’s favor.
The SEC has argued, bringing as evidence various statements by Ripple executives, that the crypto company allegedly sold XRP and XRP investors bought the cryptocurrency with the belief that their holdings would increase in value over time, making it clear that these would be securities and that therefore there would be a clear violation of investment rules.
“Ripple publicly touted the various steps it was taking and would take to find a ‘use’ for XRP and to protect the integrity and liquidity of the XRP markets,”
the SEC said in its filing.
Ripple, on the other hand, denies any contract between the company and investors and brings as evidence not only the Howey test case, but also a statement by a former SEC executive William Hinman who in 2018, when he was director of the SEC’s Corporate Finance division who, during a public speech asserted that a digital asset could lose its status as a security as it becomes “sufficiently decentralized.” The executive had specifically cited the case of Ether, which was not considered a security.
“Even if the SEC were to engage in a belated, post-discovery transaction-by-transaction analysis to identify XRP offers and sales with contracts, its claim would still fail as a matter of law. Not one of those contracts granted post-sale rights to recipients as against Ripple or imposed post-sale obligations on Ripple to act for the benefit of those recipients,”
reads the document submitted by Ripple’s defenders.
The SEC has always sought to declare such a statement not inherent in the process as evidence in favor of the defending company.
But Ripple, created in 2012 by Ripple labs under the name Open Coin, which seems increasingly convinced that it can finally reach a positive resolution of its dispute with the SEC, has in recent days announced important news on the CBDC front, where the company seems to have set its focus firmly. As of March 2021, the company has been developing a private version of XRP Ledger, specifically created to become a platform for Central Banks to issue CBDC securely.
The digital dollar project, which is carrying out an initial study project for a new digital dollar, also announced that it has formed a partnership with four crypto companies, one of which is precisely Ripple.
Central bank digital currencies play a critical role in the evolved, modern global financial infrastructure that blockchain will underpin.
Our webinar shares the future of #CBDCs, their impact on cross-border payments & the importance of interoperability. https://t.co/kAIT1DBOsb
— Ripple (@Ripple) August 29, 2022