After months of turmoil, there has finally been good Ripple news as Ripple Labs, the parent company of crypto coin, XRP won its big case with the Securities and Exchange. The SEC filed a suit against Ripple and executives Brad Gralinghouse and Christian Larsen in 2020 for selling unregistered securities (XRP).
Ripple and the SEC subsequently battled it out in court for months bringing the development of XRP to a standstill as well as the Ripple community. The judge on the securities fraud case denied the SEC’s motion to review certain documents that may not be material to the prosecution.
The SEC’s request to reconsider protecting privileged documents about a June 2018 speech by SEC’s then-Director William Hinman was denied by Presiding Judge Sarah Netburn. In the speech, Hinman said Bitcoin (BTC) and Ether (ETH) were not securities.
The Securities and Exchange Commission previously did not object to those records falling outside of the deliberative process privilege (DPP) protection, claiming that they only involved Hinman’s personal opinions and not SEC policies.
The SEC later shifted its position, claiming that the speech reflected Ripple’s policy rather than Hinman’s personal opinions and thus should be protected. Judge Netburn however warned the SEC to not contradict itself in trying to flip-flop on its assertions.
“The SEC seeks to have it both ways, but the Speech was either intended to reflect agency policy or it was not. Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its position,” she stated in her decision.
The latest Ripple news was described as “a very big win for Ripple” by one Ripple community lawyer and has been lauded by some market experts as a win that could trouble the SEC. According to some crypto experts, Ripple’s latest win over the SEC could put an end to the SEC’s delay tactics, which Ripple executives have complained about publicly, calling it “gamesmanship” in court, and requesting the Judge to apply sanctions on the plaintiff.
According to the op-ed, published on Law360, the SEC’s move, a broad claim alongside aggressive discovery motions strongly suggests the SEC expected Ripple to succumb to their pressure and beg for a settlement and that its legal arguments would never really be tested in court.
“They guessed wrong. Ripple is fighting back vigorously, and if the SEC’s sweeping arguments prevail, they could destroy trillions of dollars of stored wealth across multiple cryptocurrencies that face the same fate as XRP,” it stated.
Since the SEC failed to give any guidance despite many queries, except for Hinman’s 2018 speech declaring Bitcoin and Ethereum as non-securities, Ripple claims that if XRP is a security, the SEC failed to provide fair notice.
The latest Ripple news has also been hailed as a big win for the judicial system and not only for XRP holders and the crypto market. The SEC now has two weeks to appeal the decision but many are now doubting the necessity for that action.