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Ripple v. SEC court case update as of February 6, 2023

Ripple v. SEC court case update as of February 6, 2023

Individuals in the Securities Exchange Commission (SEC) and Ripple case are now in a waiting game regarding the potential outcome of the matter. At the moment, the participants continue to express optimism and strength of their respective defenses. 

In recent developments, Stuart Alderoty, Ripple’s General Counsel, has termed the case by SEC ‘misguided’. To highlight his take on the case, Alderoty shared a photo in a tweet on February 5 comparing the situation to the shooting down of an alleged Chinese spy baloon by the United States airforce. 

It is worth noting that Finbold reported that Alderoty stated that the matter has far-reaching implications for the future of cryptocurrency regulation in the United States. 

As a reminder, the SEC accused Ripple Labs of selling unregistered securities in the form of XRP, violating U.S. securities laws. Notably, as the case moves to the summary judgment, whose date is yet to be determined, both parties have expressed optimism about coming out with victories. 

Points of contention

Previously, John Deaton, the founder of Crypto Law, stated that SEC’s arguments were ‘schizophrenic,’ especially on what constitutes the common enterprise. In this line, Deaton noted that there is a possibility that the presiding judge could deny summary judgment.

With the case nearing a close, the XRP community has followed the matter between SEC and the blockchain-based sharing platform LBRY. In this case, the regulator sued LBRY for offering its LBC tokens without registering with the regulator. However, the judge ruled that LBC tokens are only considered securities at the time of direct sale.

Consequently, the value of LBC tokens surged, with legal experts pointing out that the same fate might befall XRP if Ripple wins the case. 

Notably, with no clear date for a ruling, interested lawyers have been speculating on a possible resolution date. For instance, James K. Filan, a U.S. defense lawyer, believes the matter be solved by March 31, 2023.

Sealing of documents 

Away from the general ruling, there is also interest in the type of documents the court will decide to seal from the public. Interestingly, the SEC filed another motion aiming to seal specific documents resulting in an uproar from the cryptocurrency community. In particular, Ripple had filed a motion objecting to an investment banker declarant’s prayer to have their information kept confidential. 

However, in their reply to the objection, the unknown declarant noted that revealing their identity could negatively impact future investigations by barring witnesses from cooperating due to a lack of assurance of confidentiality. 

In the meantime, as Ripple battles the SEC, Craig Wright, a computer scientist, and self-proclaimed Bitcoin (BTC) creator, has questioned the company’s viability. As reported by Finbold, Wright lashed out at XRP fans, terming them a ‘cultist army’ while claiming that the entire project would end up as a pyramid scheme.

XRP price analysis

Currently, XRP is trading at $0.40, having lost it by almost 4% in the last 24 hours.

XRP seven-day price chart. Source: Finbold

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