The XRP community and investors worry about what happens to their holdings in case the two parties decide to settle the scores but without taking into account the interests of the XRP token holders.
The XRP investors have been at the receiving end ever since the US SEC slapped charges on the blockchain startup Ripple for the alleged sales of XRP securities in 2020. Since then, there have been several inconsistencies in the case fueling volatility in the XRP price.
The SEC vs Ripple battle has completely gone to new levels. Besides, the current developments have also left the community member anxious. In its recent filings, the SEC has noted that Ripple “failed to develop a use case” for XRP. The SEC is now holding the Ripple CEO Brad Garlinghouse for his admission of the same.
Lead Attorney John Deaton in XRP Holders’ motion tweeted on the issue.
I’ve read closely their defense and … they’re arguing that the conduct of the SEC and of the market created a lack of clarity on the question of how XRP should be regulated.
It is not entirely clear to me still, why Ripple's state of mind on that question is relevant. https://t.co/5HBaFtHfJB
— John E Deaton (@JohnEDeaton1) May 24, 2021
The XRP price volatility recently has been largely due to the uncertainty around the case. Some believe that there’s a high chance of a possible settlement between SEC and Ripple. In one of his other tweets, Deaton claims that he is “trying to intervene so that XRPHolders have a seat at the table in order to be heard during any discussions.”
There’s a fear among the XRP holders that what if both sides settle with an outcome wherein the XRP holders are the only ones to lose. Note that the token holders are not the same as shareholders in a company. But the battle doesn’t seem to end amicably anytime sooner.
SEC Wants to Depose More Witnesses in the Ripple Case
The U.S. SEC has recently asked Magistrate Judge Sarah Netburn to depose additional witnesses in the case. This includes former Ripple CFO Ron Will and former Xpring senior vice president Ethan Beard.
The SEC notes that the need for additional depositions comes considering the wide scope of the case and “the sheer scale” of Ripple’s XRP offerings. Besides, the SEC wants the court to order Ripple for producing the documents of its lobbying efforts.
In June 2020, former CFTC chairman Chris Giancarlo said that the XRP wasn’t unregistered security. However, the SEC claims that he was on ripple’s payroll. The securities regulator noted:
“Ripple relies on statements that it paid that official to make to support its litigation position…Since Ripple has put at issue its purported lack of “fair notice” based on the beliefs of market participants, the SEC is entitled to test whether the supposed “confusion” was bought and paid for by Ripple, as opposed to a reflection of genuine market sentiment.”
There have been also questions on the massive liquidations by former Ripple CTO Jed McCaleb.