SEC Requests Extension in Ripple Lawsuit; Potential Conclusion Looms
Summary:
The SEC has requested a deadline extension from Judge Analisa Torres for a submission in the ongoing Ripple Labs litigation. If granted, the extension could potentially allow the lawsuit to conclude as the regulator compiles its discovery materials. Ripple Labs, along with its CEO and co-founder, was accused by the SEC in December 2020 of conducting an illegal securities offering through the sales of XRP tokens. In July 2023, a partial ruling favored Ripple Labs, stating that XRP did not qualify as a security within programmatic sales on digital asset exchanges. However, XRP was considered a security when sold to institutional investors.
A plea has been issued to Judge Analisa Torres by the Securities and Exchange Commission (SEC), to move the deadline for a response which could potentially conclude the Ripple Labs litigation case. As indicated in the court documents lodged on the first of March, the SEC is seeking more time to compile the discovery materials required for its remedies-related response to Ripple's submission. If the extended deadline is granted, the regulator will have until March 22, 2024, to submit its initial brief, while Ripple will be mandated to respond by April 22. The final due date for the SEC's reply would then be May 6. A remedies-oriented briefing outlines potential legal actions and solutions pertaining to the case at hand. Source of the request for extension deadline: PARCE.
The litigation battle between the SEC and Ripple Labs commenced in December 2020. The regulatory body implicated Ripple Labs, including CEO Brad Garlinghouse and co-founder Chris Larsen, of a $1.3 billion illegal securities offering via sales of the XRP token. Per the SEC's standpoint, XRP falls under the security classification, and is therefore subject to stringent regulatory standards. Ripple contested this assertion, maintaining that XRP is not a security, and that the SEC was remiss in providing appropriate advance notification of its classification.
Throughout the years the lawsuit has undergone various progressions and legal skirmishes. A critical point of contention is the "Howey test," the legal criterion employed to ascertain whether a given transaction constitutes an "investment contract" per U.S. law. The SEC maintains that XRP meets the criteria of the Howey test - a claim which Ripple rebutted.
In a significant turn of events in July 2023, Judge Analisa Torres's ruling partially favored Ripple Labs, ruling that within the confines of its programmatic sales on digital asset platforms, XRP did not qualify as a security. Nevertheless, the judge also concluded that XRP was classified as a security in the context of being sold to institutional investors. As of yet, Ripple's response to the request made by Cointelegraph has not been obtained. X Hall of Flame Magazine: MetaLawMan predicts that Coinbase 'is set for victory.'
Published At
3/2/2024 7:23:33 PM
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