While some political and corporate leaders have been eager to invest in and adopt cryptocurrencies, others are entirely hostile. Turkish President Tayyip Erdogan recently declared outright war on the Bitcoin network. President Erdoğan: "We Are At War" President Erdoğan expressed his opposition to Bitcoin in a meeting with Turkish students this Saturday. The event comes after one of them asked if the country's central bank would adopt cryptocurrencies. Erdogan responded with total rejection: "We have absolutely no intention of embracing cryptocurrencies. On the…
The drawn-out legal dogfight between Ripple and the Securities and Exchange Commission (SEC) may have taken a dramatic twist in favor of the blockchain-based digital payment company.
According to a recent tweet from Attorney Jeremy Hogan, the SEC may try to settle with Ripple before the case ever reaches trial. He explained that less than 10% of criminal and civil lawsuits ever make it to trial due to resource pressures faced by the U.S. legal system.
The attorney gave his professional opinion that the weak SEC case against Ripple was unlikely to make it into the small percentage of lawsuits settled in court.
The SEC lawsuit is currently in the pre-trial phase to allow both parties to obtain sufficient evidence from the opposing party and others sources through discovery processes.
In yet another win for Ripple, a U.S. court recently denied the SEC’s request to compel Ripple Labs to produce memos discussing XRP sales with the blockchain company’s attorneys. The judge presiding over the matter argued that the motion went against attorney-client privilege.
Ripple CEO Turns Down Option to Settle Lawsuit
News of SEC’s legal action against Ripple broke in late December 2020, prompting multiple exchanges to delist XRP in what turned out to be a devastating blow for the native coin.
At the time, the defense case for the San Francisco-based blockchain company looked dead in the water, with SEC prosecutors confident of a victory over Ripple.
Ripple CEO Brad Garlinghouse came out strongly against the lawsuit, calling it an assault on the entire crypto industry. He insisted that Ripple did nothing wrong and would be vindicated from accusations of selling unregistered securities to its U.S. clients over an eight-year period.
Six months down the line, the tide has slowly turned after Ripple scored a series of crucial wins against the SEC. Furthermore, oddities on the SEC emerged as the discovery process dragged on, including its decision not to act sooner and the blatant disregard of XRP investors.
Despite having the option to settle the case out of court, Garlinghouse and Ripple chairman Chris Larsen are opting to fight and prove their case before a judge aggressively. The motivation for this move is to push the U.S. legal system to set clear rules and prevent the SEC’s overreach on crypto.
Tech writer Roslyn Layton agreed that the case needed to be resolved in a trial to finally clarify the securities regulator’s confusing rule book on crypto.
“Some investors want to punish the SEC for its bad behavior and reduce the temptation for it to abuse its authority in the future. In any event, the SEC needs its own “Ripple Test” to restore its credibility,” Layton commented.
There is no guarantee that the trial will pan out in Ripple’s favor, but Garlinghouse’s push to have his day in court proves his firm conviction that his company was right. Moreover, the recently denied SEC motion adds weight to Ripple’s defense of ‘fair notice’ and could indicate that the odds are now with the blockchain firm.
SEC Requests for Extension on Discovery Deadline
In yet another twist to the saga, the SEC has requested Judge Analisa Torres extend the deadline for the fact and expert discovery into Ripple’s case by two months. The securities regulator cited the defendant’s failure to hand over certain documents requested during discovery as the reason for the extension request.
According to attorney James Filan, the motion to prolong deadlines for discovery could indicate that the regulator rushed to take enforcement action before finishing its initial investigation.