In an update earlier today, global tech conglomerate Meta shared news of its latest moves surrounding digital collectibles. From September 29th, subsidiaries Facebook and Instagram will now allow users to link their virtual wallets with their accounts and also share non-fungible tokens. Users Across 100 Countries Can Access New Meta Feature Everyone on @instagram and @facebook can now share their digital collectibles in the US, and on Instagram in the previously announced 100+ countries,” Meta announced in a tweet. https://twitter.com/MetaNewsroom/status/1575486040349245446?s=20&t=TpIDHfYcRCtVRMNrwYhWiA…
A New York court has declined to drop the Security and Exchange Commission’s lawsuit against payments processing company, Ripple.
Interestingly, the court also dismissed SEC’s motion against Ripple. Ripple’s CEO Brad Garlinghouse has declared the latest development a “huge win”.
Judge Denies Execs’ Dismissal Motions
A New York court turned down the motions of two senior executives at Ripple to dismiss the pending lawsuit against them. The verdict, delivered by Magistrate Analisa Torres, nullified the executives’ motions to drop the lawsuit.
Chris Larsen, co-founder of Ripple, and Brad Garlinghouse, acting CEO of the company, filed the motion in March 2021. The Ripple founders’ motions were in response to SEC’s initial lawsuit.
Going by the recent ruling, the court allowed SEC’s claims against Ripple to stand. This is despite earlier speculations that the lawsuits could be near their end. SEC’s accusation against Ripple claims the crypto company’s executives deliberately ignored the facts that made XRP’s sale as being illegal. Additionally, Judge Torres also found the agency’s claim that XRP is traded on US soil plausible.
On a positive note for Ripple, Judge Torres declined the SEC’s motion to reject Ripple’s fair notice defense. The case is still pending and awaits a final ruling
Background & Summary of Ripple’s Latest Lawsuit
The Security and Exchange Commission filed a lawsuit against Ripple at the end of 2020 for the sale of XRPs. The SEC’s argument declares the XRP coin as more of a security than it is a currency, as it was used to finance Ripple’s operations. Seeing as the company did not officially acknowledge XRP’s status as a security, the agency took legal action.
The agency also claims that Ripple has illegally sold over 357 million units of XRP to the public. It is demanding that the company refunds the profit made on these sales.
Ripple has kicked back in recent years. Instead of meeting the SEC’s demands, the company continues to maintain that the XRP token is merely a cryptocurrency and nothing more.
According to new documents which came to light in February this year, Ripple did, in fact, obtain legal counsel on XRP’s status as security back in 2012. As Ripple’s General Counsel Stuart Alderoty stated, its counsel assured Ripple that XRP could not be classified as a security. Alderoty commented that the agency’s seven-year delay in calling out XRP’s alleged illegal status was strange if anything.
Ripple, has, in turn, accused the SEC of being biased in its assessment of XRP. The company posits that other cryptocurrencies which are freely allowed to operate are no different from XRP. Furthermore, the company claims that SEC did not give it adequate notice that their actions contravened any U.S laws.
Following Ripple’s “fair notice defense” claims, SEC filed a recent motion as a counter. On Friday. Judge Torres denied the SEC’s motion to strike the crypto company from claiming “fair notice”. Ripple’s Chiefs and its legal counselors notably declared Torres’ decision as favorable.
Good to see the Judge rejecting the SEC’s attempt to prevent Ripple from pursuing its fair notice defense. It’s even more imperative that the sun sets on the SEC’s “regulation by enforcement” approach.
— Stuart Alderoty (@s_alderoty) March 11, 2022
Brad Garlinghouse was effusive:
And while we would have preferred the cases against Chris and me to end now, the SEC must now prove its claims,” the chief tweeted. “We are confident that ultimately all of them will be dismissed.”
Following the magistrate’s ruling, Ripple surged by more than 16%. The altcoin declined in the opening hours of today before rebounding at about the time of writing. XRP trades at $0.794 at present, up by 9% in the past 24 hours.