With the conclusion of the widely-publicized lawsuit of the United States Securities and Exchange Commission (SEC) against blockchain company Ripple seemingly inching closer, a pro-XRP legal expert has shared his views of the possible outcomes of the case.
Indeed, Scott Chamberlain, a former lawyer and co-founder of the permissionless Layer 2 platform Evernode XRPL, has listed five potential scenarios for the conclusion of the lawsuit, including summary judgments, the possibility of settlement, and subsequent cases, in a Twitter thread posted on March 10.
Specifically, in terms of the summary judgment part relating to Ripple CEO Brad Garlinghouse and co-founder Chris Larsen, the legal expert said he didn’t think that the regulator had “anywhere near the evidence to support they knowingly or recklessly sold an unregistered security.”
As for the summary judgment for Ripple with respect to overseas sales, Chamberlain stated that “Ripple’s sales of XRP on overseas exchanges are not within the court’s jurisdiction,” adding that “a wholly new precedent would be set to deem those domestic transactions finalized in the US.”
“Summary Judgement dismissing the part of the case that asserts XRP itself is a security – no precedent supports the digital asset itself being a security. This claim was a contrivance for the SEC not to have to prove each sale and to avoid the problem of overseas sales.”
Additionally, Chamberlain also stressed that what could proceed from this lawsuit is a limited case that would explore whether any of Ripple’s sales of the XRP token in the U.S. included an unregistered investment contract.
Finally, the fifth scenario in the view of the Evernode XRPL founder is that the case settles, provided that the precedents are established in terms of the assertion that XRP is a security and the court’s jurisdiction over overseas sales. According to his reasoning:
“I happen to believe the SEC underestimated that most of Ripple’s sales occurred on overseas exchanges through algorithmic trading. Once overseas and secondary market sales are excluded, there’s insufficient meat left on the bone.”
Win some, lose some
Meanwhile, Ripple’s legal team has secured a win in the battle against the financial watchdog as Judge Analisa Torres ruled on both parties’ motions to exclude certain expert witnesses, especially one that both Chamberlain and Ripple’s amicus curiae John E. Deaton found disastrous for the SEC’s argument.
Elsewhere, another lawsuit against a cryptocurrency business has been filed, as New York Attorney General Letitia James sued KuCoin, accusing the crypto exchange of illegally operating as a securities and commodities broker-dealer without registering in the state, as Finbold reported.