Ripple, SEC case set to end after 'summary judgment'

Ripple, SEC case set to end after ‘summary judgment’ – Mail Bonus

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The US Securities and Exchange Commission (SEC) and Ripple Labs have both called for a federal judge to issue an immediate ruling on whether Ripple’s XRP sale violates US securities laws.

In separate motions filed by Ripple and the SEC on September 17, both have asked the US District Court for the Southern District of New York to grant summary judgment.

Summary judgments are filed in court when the party involved believes there is enough evidence to issue a ruling without having to go to trial.

Both sides have urged Judge Analisa Torres to make an immediate ruling on whether Ripple’s XRP sale violates US securities laws. Ripple has claimed that the SEC has run out of answers to prove that the XRP sale was an “investment deal,” while the SEC has stuck to its belief that it does.

Ripple CEO Brad Garlinghouse, in a Twitter post on September 17, said the filings made it clear the SEC “is not interested in enforcing the law.”

“They want to redo it all in an impermissible effort to expand their jurisdiction far beyond the power Congress has given them,” he said.

Meanwhile, Stuart Alderoty, Ripple’s general counsel, said that “after two years of litigation,” the SEC is “unable to identify any investment agreement” and “cannot satisfy a single prong of the Supreme Court’s Howey test.”

In its motion for summary judgment, Ripple argued that the SEC’s case “bottles down to an impermissibly open assertion of jurisdiction over any transfer of property.”

The motion also claimed that the SEC cannot establish that XRP token holders could not “reasonably expect to profit” from Ripple’s efforts since there were no contractual obligations between Ripple and XRP token holders.

On the other hand, the SEC’s own proposal for summary judgment argued that there can be an “investment agreement” without a contract, any rights granted to the buyer, and without obligations to the issuer.

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But Ripple argued in its proposal “it is not and should not be the law, because without these important features, there is no way to use the Howey test in a reasonable way.”

Connected: The SEC vs Ripple lawsuit: Everything you need to know

Ripple instead pointed to profits arising from “market forces of supply and demand,” something the SEC “acknowledged” under the Ripple proposal.

The importance of this recognition was identified by US Attorney Jeremy Hogan in a post on Twitter on September 17, saying “these concessions are perfect for summary judgment.”

Community response

Ripple and the SEC’s proposed proposal elicited mostly positive sentiment from the XRP community, with one Twitter user opining that “the end is nigh”:

The motion for summary judgment comes nearly two years after the SEC sued Ripple, former CEO Christian Larsen and current CEO Brad Garlinghouse in December 2020 for raising $1.3 billion through unregistered securities sales through XRP.

If the court grants the summary judgment, the ruling will have a major impact on determining which cryptocurrencies are securities under US securities laws.

The XRP token surged to highs not seen since July following the proposal — hitting nearly $0.40, but has fallen slightly since then and is now priced at $0.34, according to CoinGecko.

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