It has been exactly two years since the US Securities and Exchange Commission (SEC) filed a lawsuit against blockchain startup Ripple for violating securities laws when selling XRP in 2013.
Throughout 2022, Ripple and its lawyers staunchly defended their position in multiple court hearings. The San Francisco-based blockchain startup has recorded some micro-wins when it came to gaining access to old SEC filings.
As summary judgment approaches, the Ripple vs. SEC case becomes more and more fascinating. Both - the defendants and the prosecution - are trying to maintain their comments in court. Furthermore, the SEC alleges that Ripple illegally sold its XRP, but has not produced any substantive evidence.
According to the latest developments, John E. Deaton, the attorney representing Ripple in this case, stressed that the January 30 hearing will be one of the most important for Ripple. This pertains to Ripple's ally LBRY, who has been granted permission to orally discuss his motion to restrict SEC access. The courts noted LBRY's requests and agreed to hear the arguments. Attorney Deaton believes this could be a defining moment in Ripple's battle against the SEC.
A look at the SEC filings
The attorney noted that the US SEC is seeking damages from a non-party entity, which could have greater implications and set a bad example. Additionally, attorney John E. Deaton also highlighted the intentions of the SEC, which is proposing a permanent directive that could allow the SEC to reach into secondary markets and prohibit transactions. Additionally, Deaton also criticized the SEC for seeking inappropriate punitive relief.
The SEC's battle against Ripple has seen several twists and turns. The United States Securities and Exchange Commission (SEC) ran into a deadlock when it came to disclosing documents of Hinman's speech. In its recent filings, the SEC said it is not yet ready to release Hinman's filings publicly. The Securities Regulator noted that:
The SEC respectfully argues that the documents of Hinman's speech are protected by lien. But if these documents were to become public knowledge, the SEC would be barred from making any future arguments (on appeal in this lawsuit or other lawsuits), which would be highly prejudicial to the SEC.
In another development, Ripple gains an edge over the US SEC, as the US DoJ recently classified digital assets such as MNGOs and CRVs as commodities and not securities. This could give Ripple the leeway to push the SEC to back down on the requirement that XRP (quotation real-time) is a title.