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Ripple has been fighting with the United States Securities and Exchange Commission (SEC). After several ruling, the case seems in favor of the fintech firm. Notably, a former executive from the agency believes that the regulator has a good chance of losing its $1.3 billion lawsuit against one of the leading financial technology firms on the merits of the case. Moreover, Attorney Joseph Hall, deemed that the US SEC is not yet equipped to handle litigation in cases concerning digital assets as securities yet. Hence, the scenario has made it hard for the regulator to win the case against the firm.
What does the SEC plan on proving in the XRP litigation?
Attorney Hall has also voiced concerns over the regulatory agency’s endgame. According to the attorney, the ultimate result could be regarding the high-stakes case against Ripple which will have ramifications for the entire ecosystem.
Furthermore, it has been observed that the lawsuit alleges that Ripple and its co-founders failed to notify the regulators regarding the sale of Ripple’s native cryptocurrency.
Brad Garlinghouse and Christian Larsen, the co-founders of the project, failed to notify the SEC about its sale of XRP beginning in 2013 and that the tokens are unregistered securities. Indeed, the US SEC has been trying to prove that the securities fraud took place as a result.
The SEC is working to find a single chance so it can prove that at Ripple, some kind of securities fraud has taken place. Additionally, Hall highlighted that he is not entirely sure about what the regulators are planning on proving in the Ripple lawsuit.
What if the SEC loses on the merit of the Ripple case?
According to the Attorney, the implications for the regulators and for the crypto industry as a whole are massive. Indeed, the SEC has a lot riding on the case. If the agency loses on the merfit of the case, its entire regulatory project could be basically shut down. Moreover, it is worth mentioning that there is a pretty good chance that the US SEC will lose on the merits.
Ripple has a strong defense as the regulators failed to give fair notice of its investigation.
