The much-anticipated protocol struggled to process user transactions, then became the target of some Twitter shade for changing some terms of a contribution pledge on the fly.
Despite both parties in the Ripple and Securities Exchnage Commission (SEC) case making final submissions and awaiting summary judgment, the main focus still lingers around the regulator’s power in providing oversight in crypto alongside unsealing vital documents.
Under the latest update, pro-XRP lawyer John Deaton has questioned a statement by SEC chair Gary Gensler alleging that any crypto besides Bitcoin (BTC) is classified as a security. It is worth noting that the SEC is using Ripple for selling XRP as unregistered securities.
In a tweet on February 27, Deaton stated that there is no consensus regarding securities classification. He made the remarks in reaction to a comment by MicroStrategy executive chairman Michael Saylor who noted that Gensler’s remarks are testimony that consensus is building on the classification of securities.
Not true. Outside of @GaryGensler’s 🧠 and #BTC Maxis, there’s no consensus everything other than #Bitcoin is a security. There certainly isn’t a consensus w/in the legal community. Software code is NOT a security. It, like any other asset, can be offered and sold as a security. https://t.co/MokmwLr7Ok— John E Deaton (@JohnEDeaton1) February 27, 2023
Possibility of settling
Previously, Deaton shared the possible arrangements for both parties to settle even as they await the summary judgment. According to Deaton, Ripple would pay $100-250 million in a settlement if the regulator agrees that ongoing and future sales of XRP are not classified as securities.
However, he cautioned that the likelihood of the SEC agreeing to the approach was minimal, considering the agency’s increased crackdown on the digital asset space. Deaton pointed out that the presiding judge could clarify XRP’s secondary sales in this case.
It is worth noting that Ripple General Counsel Stuart Alderoty had earlier insinuated that the SEC has minimal chances of winning the case at the Supreme Court based on historical outcomes.
“The SEC has lost 4 of its last 5 cases in the Supreme Court, thanks to the few that had the courage and resources to fight back against the SEC’s bullying and clinging to stretch legal positions that were not faithful to the law,” he said.
Unsealing of Hinaman documents
As previously reported, the case received new rejuvenation after a journalist Roslyn Layton, filed a motion to gain access to the Hinman speech documents. The speech was issued by the former Director of the SEC’s Division of Corporation Finance in June 2018 and could offer a clear representation of how the SEC classifies securities. Hinman noted that Ethereum (ETH) and Bitcoin are not securities, and the same approach could be applied to XRP.
Therefore, with chair Gensler pointing out that only Bitcoin is not a security, the unsealing of the document becomes a significant part of the case.
Layton’s motion has also received support from the U.S. government watchdog Empower Oversight.
Elsewhere, defense lawyer James Filan also revealed a new development in another long-running legal battle where Ripple has been facing a class action since 2018. In the matter filed in California, XRP investors sued the company and its CEO, Brad Garlinghouse, for selling XRP as an unregistered security and are seeking damages for the losses they suffered. They are requesting that the court declare XRP a security.
As reported by Finbold, Deaton had filed a motion to join the matter as an amicus brief. In the latest update, the plaintiffs filed another motion opposing Deaton’s prayer to be included in the matter.
#XRPCommunity #SECGov v. #Ripple #XRP The California plaintiffs have filed a Brief in Opposition to @JohnEDeaton1’s Motion to File an Amicus Brief in Zakinov v. Ripple. @JohnEDeaton1 has officially taken up residence in the California attorneys’ heads.https://t.co/QcxAg8S8Jw— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) February 25, 2023
XRP price analysis
In the meantime, XRP is among the assets likely to be impacted by the case outcome. By press time, the token was trading at $0.37 with daily losses of about 1.5%.
XRP controls a market cap of $18.9 billion.