- The XRP lawsuit between Ripple Labs and the SEC is ongoing, with a much-anticipated summary judgment pending.
- The recent release of XRP Howey memos and the SEC’s approach to classifying digital assets as securities is expected to provide regulatory clarity to the market.
- The SEC’s approach is likely to continue regardless of the outcome.
The digital asset market has been anticipating regulatory clarity for a long time. The US Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs may finally bring it. However, the much-awaited Summary Judgment of the XRP lawsuit could be delayed. Could we finally see a decision on the anticipated deadline day of March 31st?
Ripple Lawyer Criticizes SEC’s Handling of Case
The extensive case between Ripple and the Securities and Exchange Commission (SEC) has taken yet another turn, with criticism being leveled against the regulator over its handling. The SEC claims that anyone who acquires XRP in Japan is part of a common enterprise with Ripple and all other XRP holders. The assertion is based on the view that the token is a security, despite Japan’s Financial Services Agency stating that XRP is not a security.
In a tweet dated February 19th, Ripple’s lawyer, John Deaton, publicly criticized the SEC’s claims, calling them “stupidly outrageous.”
The SEC’s claims are so stupidly outrageous that it argues a person who acquires #XRP in Japan is in a common enterprise w/@Ripple “and all other #XRP holders” and #XRP is a security - even though Japan’s own regulator says its not. #XRP is the 2nd most popular crypto in Japan. https://t.co/jrEHVfnpsB— John E Deaton (@JohnEDeaton1) February 19, 2023
Deaton stated that he would not have filed a suit against the SEC if it had only pursued Ripple’s sales. The lawyer asserted that the only victory the SEC would likely attain in the case against Ripple is that the company sold XRP as a security from 2013 to 2017.
Once again I will say:— John E Deaton (@JohnEDeaton1) February 19, 2023
Ripple’s offers and sales of #XRP may have violated U.S. securities laws. And if the SEC were only pursuing Ripple’s sales, I would have never filed suit against the SEC.
Deaton Talks XRP Memo Legal Proceedings
Deaton recently spoke out about the legal proceedings surrounding the XRP memo. According to reports, the memo is protected by the Deliberative Process Privilege (DPP), which means that Ripple did not intend to obtain it when the court handed it over.
While the memos were noted to have no recommendations at the end, there is still significant controversy surrounding the issue. Deaton has gone so far as to suggest that the Judge’s decision over the XRP Howey Memo was a very close call.
This sentiment was echoed in an amicus brief filed in court, highlighting the importance of taking a critical approach. Ultimately, the circumstances around the XRP memo remain unclear, and further legal action will likely be required before a final decision can be reached. Despite the uncertainty, there have been claims that the SEC has overreached its jurisdiction.
Implications for the Future of the Digital Asset Market
In addition to Deaton’s criticisms, Ripple’s Chief Legal Officer, Stuart Alderoty, has suggested that the SEC may be overstepping its authority.
He emphasized the importance of observing the rule of law to prevent government agencies from becoming autocratic. Alderoty cited the 1936 case of Jones v. SEC, in which the courts were vigilant against the threat of “officialdom unchained.”
Deaton recently revealed that there is no deadline for the Summary Judgment yet, and a list of pending motions has been in the queue for over six months. These motions are slated to be submitted at the end of March or September.
While the lawsuit’s outcome is still up in the air, Deaton suggests that Ripple winning would not affect regulations much. Regulatory clarity in the crypto industry might not happen until 2025.
On the Flipside
- The SEC’s lawsuit against Ripple Labs and two of its executives is ongoing, with no definitive ruling or outcome yet.
- It remains unclear when the SEC will issue clear-cut guidelines and regulations on digital assets, even following the resolution of its suit against Ripple.
- Despite the ongoing legal battle, Ripple has continued to expand its global partnerships with financial institutions, including remittance providers and banks in Asia and Europe.
Why You Should Care
The Ripple vs SEC lawsuit is expected to set a regulatory precedent for the crypto market and provide much-needed clarity for the industry. Despite the anticipated Summary Judgment, further delays may elicit further confusion over the definition of a security and the role of native tokens.
Find out more on recent changes at Ripple:
Ripple Shakes Up Leadership Ahead of XRP Lawsuit Outcome – What to Expect in Advance
For more information on the SEC and Ripple Lawsuit:
Ripple vs. SEC Saga Approaches an End as Crypto Firm Files Final Submission