The SEC seeks to compel Ripple to register XRP as security or pay a fine for selling it as an unregistered security.
In an ongoing lawsuit filed by the Securities and Exchange Commission (SEC) against Ripple Labs, Southern District Court of New York Judge Sarah Netburn granted the latter access to documents regarding Bitcoin and Ethereum. However, Netburn denied access to staff-to-staff email communications on the same matter. “I’m going to grant in large part the defendants’ motion,” said Netburn.
Mid last month, Ripple filed a motion to compel the SEC to produce documents regarding the SEC’s communications about Bitcoin and Ethereum or its internal communications about XRP.
Having been granted access to the internal documents, the lawsuit is expected to take a whole new direction in favor of Ripple and its management. Notably, one of the layers representing Ripple, Mathew Solomon, argued that it could be ‘game over’ for the entire case should they catch the SEC having called XRP as a currency rather than a security.
Recent Ruling on SEC-Ripple Lawsuit
The news was a huge relief to the entire crypto community, especially the XRP market, which responded positively by the end of the day. Notably, XRP market price jumped over 5.7% in the past 24 hours according to CoinGecko, and is currently ranked the fourth by market capitalization. XRP recorded its highest level since the 2017/2018 bull market at around $1.10.
“Today was a good day,” Brad Garlinghouse tweeted yesterday. XRP is now up approximately 406% in the past 12 months. Besides, it jumped around 110%, 77%, and 73% in the past one month, two weeks, and seven days respectively according to CoinGecko.
The SEC accused Ripple of raising funds from the public by selling XRP, which it regarded as unregistered securities. Specifically, the SEC accused the company of selling XRP worth approximately $1.3 billion. As a result, the regulator seeks to compel Ripple to register XRP as security or pay a fine for selling it as an unregistered security.
“Issuers seeking the benefits of a public offering, including access to retail investors, broad distribution and a secondary trading market, must comply with the federal securities laws that require registration of offerings unless an exemption from registration applies,” said Stephanie Avakian, Director of the SEC’s Enforcement Division. “We allege that Ripple, Larsen, and Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.”
However, Ripple and its team of layers argue the SEC has watched the XRP market grow for almost a decade without any concerns.
next