Last year, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs, the creator of the crypto-XRP currency (CRYPTO:XRP). The SEC alleged that the company and two senior executives conducted an illegal securities offering, implying that XRP is a security and not a cryptocurrency.
The government body also claimed that the company had raised more than US$1.3 billion through an unregistered securities offering.
Ripple Labs responded to the SEC allegations by asserting that XRP is not, in fact, a security. It is a useful tool for transferring value across borders through Ripple products, but it is not a security that should have been registered under SEC regulations.
The case continues to drag on, but it could be seen to be in favor of the cryptocurrency developer. The court’s decision on the matter could have a lasting impact on cryptocurrency regulation. However, the case itself has slowed the cryptocurrency’s bid to achieve greatness in the fledgling industry.
A crucial date for the case is coming
The proceedings have been going on for over a year now, but the excitement is building. The lawyer representing Ripple Labs said that the biggest decision regarding this case will take place soon. Read also: Bitcoin’s gains are likely to be limited in the downtrend with first resistance at 36300/400.. However, that seems unlikely due to the court’s approval of the SEC’s Deliberative Process Privilege (DPP), a legal defense that provides government institutions with immunity from revealing internal correspondence.
The SEC and the defendants will file a joint motion for a trial order on April 22, 2022. Judge Sarah Netburn ordered the two parties to agree to a schedule for bringing summary judgment motions in this case.
There is a realistic possibility that the two parties will reach a settlement agreement at that time, as that would be the quickest way to end the proceedings. However, a judgment in favor of Ripple Labs could send waves of relief through the crypto industry.
A strong defense
Ripple Labs made a valid point in the case, arguing that the agency failed to give the developer fair notice regarding its potentially unlawful conduct. See the article: Coinbase adds rewards for Cardano Stacking (ADA). The company insists that the SEC should have provided clarification on whether it considers XRP a security, as the government agency had ample time to do so.
The SEC has filed a motion to dismiss the affirmative fair notice defense for Ripple Labs. The court rejected this motion, announcing great news for the cryptocurrency developer in this case. Ripple Labs’ legal team criticized the SEC for causing further delays in the proceedings.
The attorney also said that the rules proposed by the SEC during these litigations mean that more parties won over to the cryptocurrency industry can expect lawsuits in the future.
The outcome of this case will set a precedent for further regulation of the cryptocurrency industry in the future.
Consequence for the XRP token
The case seems to be turning in favor of Ripple Labs, but the XRP token has been delisted from cryptocurrency exchanges in the United States. Most XRP holders are located outside of the United States, but the move has stalled the growth of the cryptocurrency to a large extent. This may interest you: Exotic Markets launches first dual-currency notes and accumulators on DeFi. A win for Ripple Labs could see major cryptocurrency exchanges re-list XRP on their platforms and give its prices a massive boost.
Analysts forecast a price of $1.30 for XRP in 2022, despite setbacks. XRP is trading at US$0.82 at the time of writing. Depending on the outcome of the case, the analysts’ price prediction for the cryptocurrency might be achievable.
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