Ripple’s battle with SEC draws to a close
Both Ripple and SEC file motions for summary judgement to avoid going to trial
The longstanding legal battle between the US Securities and Exchange Commission (SEC) and Ripple Labs is thought to be drawing to a close.
Both parties filed their redacted replies in support of their respective motions for summary judgement at the end of last week. The move has been seen as an attempt to avoid going to trial.
The firm behind the Ripple blockchain, which maintains that, contrary to the SEC’s claim, XRP is not a security, argued that the SEC had failed to demonstrate that its sale of XRP was an offer for an investment contract, rendering the argument that the token is security invalid.
The company’s lawyers added that the SEC, the leading financial regulator in the US, had not shown that the purchasers of XRP purchased a “common enterprise”, one of the four criteria used to establish if an investment contract exists.
Ripple’s general counsel, Stuart Aldertoy, confirmed that the latest filing was the company’s “final submission”, adding: “Ripple is proud of the defence we’ve mounted on behalf of the entire crypto industry. We have always played it straight with the court. Can’t say the same for our adversary.”
Fourteen formal amicus briefs were submitted in support of Ripple last month by a range of firms including the Blockchain Association, Coinbase and the Chamber of Digital Commerce.
Only one entity, the New Sports Economy Institute, formally filed an amicus brief in support of the SEC. InvestReady, previously known as Accredify, had also hoped to support the regulator. However, the company, which helps investors’ eligibility for online equity investments, failed to filed before the November 18 deadline.
Ripple’s CEO, Brad Garlinghouse, said: “I said it on day 1one, we will aggressively fight to get clear rules for the entire industry in the US.” He hailed his team for standing strong and withstanding “the SEC’s onslaught”, adding: “I look forward to being on the right side of justice.”
XRP was down 1.76% at $0.38 at 9:28 UTC on 6 December. XRP’s market capitalisation has halved since January from $40bn (£33bn) to $19.6bn, suffering a similar fate to most cryptocurrencies in 2022.