For Ripple (XRP) it runs in court against the US Securities and Exchange Commission (SEC) further slowly, with increasingly positive. An interim decision in New York legal observers as a stage victory for Ripple.
The showdown between the powerful U.S. Securities and Exchange Commission (SEC) and Ripple (XRP) is moving investors and the crypto industry – quite a few expect the trial in New York to provide clues as to how the SEC wants to and is allowed to intervene in Bitcoin and the like in the future. But especially with the example of XRP, which is to be classified as a security, the SEC is increasingly on the defensive in its presentation of evidence. Recent rulings by the court indicate a discomfort with litigation by the SEC, with attorney and observer James Filan writing on Twitter of a “very big win for Ripple.”
Specifically, Judge Sarah Netburn has now denied motions by the SEC to reevaluate the significance of internal documents. At issue is, at its core, a 2018 speech by SEC director William Hinman on Ethereum (ETH). In that appearance, Hinman had made clear that the agency was not pursuing Ethereum for suspected authorization-required status as a security. What applies to Ethereum must also be applied to XRP, Ripple argues. Therefore, Ripple also wants to introduce emails and transcripts of conversations from the SEC, which served to prepare Hinman’s speech, into the proceedings.
Since January, there has been some back-and-forth about this, with Ripple insisting more and more loudly on its right to a fair defense, and succeeding in doing so. In the latest decision, the court admits the internal SEC communication as relevant and orders the SEC to be able to justify any redactions in a meaningful way.
Conclusion: Is the SEC applying too strict standards to XRP?
It can also be gleaned from Ripple’s defense that it remains convinced that the SEC is withholding crucial details from its past positioning vis-à-vis Ethereum. And if Ripple and XRP were actually mentioned in the same breath as ETH internally at the SEC, the indictment would probably collapse. What is clear for now, however, is how the SEC is getting stuck in its efforts to block Ripple’s defense. This hardly seems sovereign and could develop into a legal boomerang for the SEC. A ruling on XRP is expected in the summer at the earliest.
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