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- XRP cryptocurrency is classified as a security unlike other altcoins and Bitcoin that are considered as commodities
- SEC filed a complaint against Ripple Labs last December for raising money through unregistered securities
- Ripple Labs has filed a motion that requests the SEC to reveal crucial documents for XRPs classification
Ripple’s CEO Brad Garlinghouse is after the SEC as his crypto company has set a motion to disclose crucial documents about various cryptocurrency documents. The SEC had alleged that Ripple raised over $1.3 billion via unregistered securities in December. Even after several requests from the United States magistrate judge the SEC failed to disclose the aforesaid documents. The SEC and Ripple have met 5 times to resolve the issue as soon as possible but it seems that the long battle has just been stretched.
Fair notice victory for Ripple?
A Fair Notice Defense states that the defendant did not receive a fair notice from the plaintiff. Ripple Labs has argued the same and it awaits the judgement summary for the same. The SEC runs on fines collected from the wrongdoings of organisations.
If Ripple wins the battle, the SEC will not be able to run after any cryptocurrency firm in the country. The SEC has tried to stall the proceedings but Garlinghouses’ Ripple is determined to turn the table in their favour.
Also read: SEC Loses Motion to Gain Access to Ripple’s Legal Files
Every episode closely watched by crypto community
Regulations surrounding cryptocurrency are detrimental as investors have seen prices tumble for various digital currencies. The classification surrounding XRP has raised eyebrows where investors continue to remain cautious. Ripple argued that it has not committed any fraud by raising funds via transfer of digital currency.
The case SEC v Ripple will set precedence over regulations governing cryptocurrencies. There has been a cloud over XRPs classification as a security and not a commodity. The two parties have agreed to seal certain exhibits and not add pressure on the court with unnecessary disputes.
Settlement agreement on the cards
Ripple is poised to pay fines until the date the lawsuit began and not to disgorge profits to purchasers as it is a tedious task. They will also agree to contain a term that limits sales of XRP from an escrow account. Ripple’s concern will be to maintain its business and ODL and replace the trust in exchange to re-list XRP. The sales of XRP will be limited to private companies and clients and potentially bottleneck the flow of XRP for years.
They have extended the deadline to file a joint motion and confer regarding documents redaction. Lastly, the judge retains the power to dismiss the lawsuit for possible discovery violations on behalf of the SEC.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
