Rumors are circulating on crypto-Twitter that the two-year-long legal dispute between the SEC and Ripple Labs is about to end.
Ripple SEC news at a glance
As early as December 10, Cardano founder Charles Hoskinson speculated one in an Ask-me-everything (AMA). Completion of the Ripple process on December 15. But the next day he clarified that these were just baseless rumours.
But Ripple CEO Brad Garlinghouse is also awaiting a court decision in the short term. According to a statement at the DC Fintech Week conference on October 11, he expects the process to be completed in the first half of 2023. However, it is difficult to set a deadline. Therefore, this is only a speculative assessment.
However, Garlinghouse brought a breath of fresh air to the crypto-Twitter litigation discussion by discussing a possible settlement with the SEC. In return, they must not classify the XRP token as a security.
Former US congressional candidate January Walker then spoke via Twitter. According to her, an agreement between Ripple Labs and the SEC would be a loss for the whole world and therefore also for Web 3. Because the whole world follows the actions of the United States.
“Rather than fight and pretend one group is better than another, we need to work together to get the legislation passed,” Walker said.
The “Ripple case” from the perspective of a legal expert
Crypto attorney Jeremy Hogan, meanwhile, shared in a YouTube video on Dec. 10 that there are multiple options for the outcome of the case. In his opinion, the probability of Ripple winning is around 50%..
“There is a 110.6% chance that something will happen shortly,” added the lawyer.
The lawyer also predicted the most likely reason for Ripple’s victory in court. Because Ripple Labs has never offered investment contracts to buyers of XRP tokens. There was therefore never any legal obligation towards the buyers.
The lawyer also predicted the court’s decision before April 1, 2023. He supports the Nov. 4 prediction by defense attorney and former U.S. prosecutor James Filan. The basis of the assessment appears to be a statement from the highest authority.
Court case affects entire crypto industry
The legal dispute between Ripple Labs and the SEC has accompanied the crypto scene since December 21, 2020. On that day, Ripple CEO Brad Garlinghouse announced a proposed indictment by the United States Securities and Exchange Commission. The price of XRP reacted relatively calmly to this news: it fell from $0.5569 to $0.5169.
When the announcement came true the next day, the price of XRP was halved to $0.25. According to the indictment, Ripple founders Brad Garlinghouse and Christian Larsen traded securities without a license. A total of 14.6 billion Ripple tokens were reportedly sold and more than 1.3 billion USD went to the Ripple account. And without permission.
In the end, the founders of Ripple faced three counts:
- Trading in unlicensed securities – where the question is whether the XRP token is a security.
- Price manipulation by Ripple Labs – this is how Garlinghouse and Larsen allegedly accumulated large amounts of XRP and controlled the market through buying and selling.
- Ads purchased – According to the indictment, funds were paid to crypto exchanges to induce them to accept the XRP token.
Since the XRP token is used as security from an SEC perspective and not a pure cryptocurrency, the case affects other crypto values as well.. A huge rally was spreading throughout the crypto sphere. Crypto exchanges took the XRP token out of supply and speculation began. Because if XRP is classified as a security, exchanges in the United States would engage in unauthorized securities transactions.
“This is an attack on the entire crypto industry and American innovation,” replied Garlinghouse shocked and angry.
Ripple Labs vs SEC Timelapse: How has the price reacted?
On April 6, 2021, Ripple Labs then looked for a comparison between their XRP tokens and Bitcoins BTC and Ethereums ETH. Judge Sarah Netburn granted Ripple’s request for the release of internal documents regarding Bitcoin and Ethereum. This was a big step for Ripple, as the SEC had already declared that it would not take any action against Ethereum or BTC trading.. Thus, the price of XRP reacted by rising from 0.58 USD on April 02 to 1.54 USD on April 16, 2021.
On June 14, 2021, the court extended the deadline for the SEC to disclose its internal crypto trading policies to August 31, 2021. Two days later, the relevant New York District Court ruled that the SEC was not authorized to review Ripple’s internal banking records for the past 8 years, as they had requested. This meant the SEC had to release documents, unlike Ripple – another win for Ripple, which did not appear in the XRP course. This dipped until mid-July – likely due to choppy waters and the strength of other crypto assets.
Basically, the court was still trying to find out how the United States Securities and Exchange Commission judges crypto assets. Rumors of XRP holdings among SEC employees and leaked internal emails between August and September gave Ripple Labs a boost. Thus, the price of XRP rose from 0.58 USD in mid-July to 1.25 USD in early September.
The comparison between Ripple and the SEC has been in the air since October 2021. It appears that both parties lost interest in reviewing the opponent’s materials. Rumors that the lawsuit would be dismissed in the first half of 2022 caused the price of XRP to rise from $0.62 in mid-January 2022 to $0.83 in early April 2022.
But the end of the legal dispute was becoming more and more distant. As a result, and with the participation of the bear market, the price of XRP fell to $0.31 in mid-June 2022.
A statement made by former SEC director William Hinman in 2018 also denounces the SEC accusations. Hinman clarified that BTC and ETH are not securities, although the sale of ETH was very similar to that of XRP. The inconsistency on the part of the SEC in this case should now make the judges impatient.
In November 2022, the United States Securities and Exchange Commission again submitted a request for an extension of time. It looks like a desperate attempt to artificially prolong the damage to the crypto industry. But the SEC could also gather its last strength to deal a big blow to Ripple Labs.
We hope to be able to report a positive outcome of the procedure by March 2023 at the latest! Because if Ripple wins this lawsuit, crypto companies could refer to the Ripple case in the event of similar lawsuits.
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