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Ripple v. SEC case update as of April 17, 2023

Ripple v. SEC case update as of April 17, 2023

As the legal saga between Ripple and the United States Securities and Exchange Commission (SEC) continues, it has come to the public attention that the securities regulator has lost as many as five out of six of its latest cases before the Supreme Court, signaling optimism for the cryptocurrency community.

Indeed, the most recent of its lost cases before the Supreme Court is the SEC v. Michelle Cochran, in which the regulatory agency had accused a certified public accountant from Texas of alleged failure to comply with federal auditing standards, according to the tweet posted by the blockchain company’s General Counsel, Stuart Alderoty, on April 14.

‘Clairvoyant’ investor

On April 16, attorney John E. Deaton, who represents more than 76,000 XRP token holders in the ongoing lawsuit, shared a video from 2018 in which US investor Tim Draper told none other than Gary Gensler (before he became the SEC chairman) that the banks were panicking about the crypto market, as well as that there would be lawsuits, media pressure, and influence on financial regulators to impede its rise.

Referring to Ripple’s own struggles with getting documents from the SEC, Alderoty also shared an update referring to the stern letter to Gensler regarding the request for records relating to the arrest of former crypto exchange FTX CEO Sam Bankman-Fried, written by the US House of Representatives Financial Services Committee Chair Patrick McHenry and the chair of the Oversight and Investigations Subcommittee, Bill Huizenga.

Specifically, Bankman-Fried was scheduled to testify before the Financial Services Committee on December 13 but was prevented from it by his arrest, which is why the Committee had already written to Gensler on February 10. However, the SEC failed to produce the requested documents in time and instead provided irrelevant documents.

SEC’s ‘irrelevant’ arguments

As Finbold reported on April 12, the SEC’s legal team had earlier filed a letter of supplemental authority in further support of its summary judgment motion, in which it referred to a Massachusetts court’s decision denying the defendants ‘fair notice’ argument and siding with the regulator in a securities fraud case.

In response, Ripple’s lawyer Michael K. Kellogg argued that the proceedings from the case to which the SEC was referring were “an out-of-circuit, unpublished district court opinion” and irrelevant, as Ripple had “abundant evidence (…) showing that reasonable market participants, trying to understand what the SEC would permit or prohibit, concluded that Defendants’ offers and sales of XRP were not ‘investment contracts,’ and told the SEC so.”

As things stand, XRP, which saw $8.8 billion injected into its market cap in 30 days, is changing hands at the price of $0.51. This represents a decrease of 1.39% on the day but still a 1.57% gain in the last seven days, as well as an increase of 34.88% on its monthly chart, as per the latest data retrieved on April 17.

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