It’s been 171 days since the US Securities and Exchange Commission (SEC) challenged XRP and Ripple Labs directly by filing a lawsuit against them. There have been a slew of motions and memorandums exchanged so far, but no clear winner has emerged. Every court judgement has had and will continue to have far-reaching repercussions in this case, which is unusual and perhaps exceptional in its own right.
Ripple Has Had A Upper Hand
To begin with, the SEC’s decision to obtain legal advice documents from Ripple has clearly backfired. They had flatly accused the blockchain firm for “ignoring” legal advice, and after the court ruling, they had lost their main counter-argument to the defendants’ fair notice defense.
Ripple, on the other hand, has already presented two key defenses and has been systematically attacking the SEC’s blame game. Ripple replied by accusing the SEC of “shifting its tune” as the agency demanded additional witnesses for discovery. Additionally, the San Francisco-based blockchain firm stated that the SEC’s request for a discovery extension poses a “existential threat” to it.
According to many, the SEC’s handling of the matter has been misguided. Even after receiving several demands to produce BTC, ETH, and XRP-related papers, it has remained deafeningly silent. Ripple, on the other hand, has complied with nearly all of the agency’s requirements. Overall, it’s fair to say that the SEC has already gotten more than it asked for, but it’s constantly expanding its horizons.
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Should Ripple Settle?
The case’s soul, for now, resides in the aforementioned defense, for Ripple at least. Commenting on the odds of the blockchain firm winning the same, renowned attorney Jesse Hynes recently opined,
“I expect Ripple/def to defeat the SEC’s option to dismiss the fair notice defense…”
The lawyer was also careful to remind that his advice should be taken with a grain of salt because the decision might go any way. However, if Ripple’s fair notice defense is upheld, the issue could be settled or concluded before the summary hearing.
The community, of late, has been against Ripple settling the case. One, it would set an “unfair” precedent and two, it would mean the firm succumbing to the SEC. In Hynes’ opinion, Ripple should only go on from here instead of looking back and giving in.
Ripple, on the other hand, is expected to go public following the end of the case. With that in mind, it would not want to “destroy” the SEC, therefore the settlement option cannot be fully ruled out at this time.
Stefan W. Huber said on Twitter:
“Ever thought that maybe Ripple is using the time until settlement to anticipate as much ambiguity as possible regarding the IPO and make it a binding part of the settlement? Remember: Ripple already wanted to go public last year.”
Even though it isn’t clear who has the upper hand, it wouldn’t be unfair to say that the pendulum is swinging in favor of the blockchain corporation, at least for the time being. It should be noted, however, that even if Ripple wins the fair notice motion, that does not ensure a victory at trial. Hynes clarified the situation by saying,
“Winning on this motion does not mean the defense will win on trial. It’s just that it can be argued at trial. Winning this motion is not an indicator that the judge will side with this defense when it comes to the disposition of the case in issue.”
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