- Ripple Inc.’s legal team doesn’t plan on settling with the SEC over the lawsuit on XRP.
- Gensler supports innovation and pursuit of the lawsuit would only deter the same.
Ripple Inc.’s legal team doesn’t plan on settling with the US Securities and Exchange Commission (SEC) on XRP. As Charles Gasparino of Fox Business tweeted Friday:
Ripple’s legal team tell Fox Business they have no plans to settle with SEC over a lawsuit on XRP, confident they can show Gary Gensler in pursuing the case is picking winners and losers in the crypto business to the detriment of innovation.
Since December last year, the SEC vs Ripple case has been running over Ripple’s alleged sale of unregistered securities. CEO Brad Garlinghouse and co-founder Chris Larsen were also implicated. Earlier when Garlinghouse was asked why they were yet to settle with the regulator, he said:
Can’t get into specifics, but know we tried — and will continue to try with the new administration — to resolve this in a way so the XRP community can continue innovating, consumers are protected and orderly markets are preserved.
Conflict of interest in Ripple and SEC lawsuit on XRP?
At some point, current SEC Chair Gary Gensler was a crypto professor at the Massachusetts Institute of Technology (MIT). This post gives Ripple and XRP supporters hope that he will support innovation and eventually act in their favor. These supporters are also confident that there was a conflict of interest with former SEC Chair Jay Clinton.
Under Clinton’s leadership, the commission sued Ripple. Just a few days later, Clinton stepped down from his position, leaving the incoming boss to carry on with the lawsuit. In August, government watchdog Empower Oversight began investigating the circumstances surrounding the lawsuit, Clayton, and senior SEC official William Hinman.
While having taken a cautious approach during service at the SEC, Clinton is now showing great interest in the crypto space. He now makes part of the board in two different crypto firms namely: One River Asset Management and crypto custodian Fireblocks.
“I’m very bullish on the ability of blockchain and other technologies to eliminate frictions in the system,” Clinton says.
Light at the end of the tunnel?
Last week, Gensler expressed great positivism in innovation. During the Senate Banking Committee hearing, pro-Bitcoin Senator Cynthia Lummis asked Gensler, “Do you support responsible innovation?” Without hesitation, he replied:
Oh my gosh, yes. I mean it’s brought us these lights in the room. It’s brought us this ability to have a hybrid hearing with your fellow members. I mean innovation is what supports access, economic activity, and give so much of us better opportunities in life.
Even more, Satoshi Nakamoto’s innovation is real, as Gensler asserts. “His innovation spurred the development of crypto-assets and the underlying blockchain technology.” Moreover, “it has been and could continue to be a catalyst for change in the fields of finance and money,” he added.
What remains now for Ripple and XRP supporters is watchful waiting, hoping the lawsuit ends soon and ends well, for them.
Ripple, SEC back in the ring, due to a Court of Appeals decision in a separate lawsuit
Those following the SEC vs Ripple Labs lawsuit might have expected radio silence for the rest of the year, after the court pushed the discovery deadline to 14 January 2022. However, a new development in early December has caused a splash. Now, it seems that both the SEC and Ripple will need to take action.
Yet another deadline
A filing shared by defense lawyer and former federal prosecutor James K. Filan revealed that Judge Sarah Netburn ordered both parties in the case to file more documents. However, this was due to legal developments in a totally different court case.
Citing the “scope of the deliberative process privilege,” the judge stated,
“In light of this decision, by December 8, 2021, the parties shall simultaneously file letter briefs no longer than three pages to supplement their arguments concerning Defendants’ motion to compel, ECF No. 289.”
What is deliberative process privilege? To refresh your memory, this protects an institution’s decision-making process from external parties – including defendants in the court, if need be.
In simple English, please
Outside the crypto world, the Natural Resources Defense Council sued the U.S. Environmental Protection Agency [EPA], which was ordered to produce specific documents about its pesticide policies. The EPA objected to this, and deliberative process privilege was a part of their reasoning for the same.
The United States Court of Appeals for the Second Circuit ruled that the EPA didn’t have to show all of its records concerning a policymaker’s role. What’s more, the court issued a new decision regarding what is covered under deliberative process privilege.
Now, Ripple Labs is feeling the ripples. After all, the SEC claimed deliberative process privilege after the blockchain company filed a motion compelling the regulator to produce three additional email documents.
As previously reported, Ripple claimed the documents “appear to be Highly Relevant to the Defense.”
Naturally, the XRP community has been wondering whether this update helps or harms Ripple.
For his part, attorney Jeremy Hogan claimed,
“…I’ve read the opinion and the law change slightly favors the SEC. Let’s see what the briefs say!”
In less than five days, both the SEC and Ripple will need to understand the new decision, and quickly submit their arguments. This has huge implications for Ripple’s motion to compel the SEC to produce the three documents.
Rain on Ripple’s parade?
The unexpected court development comes around a week after Ripple CEO Brad Garlinghouse expressed his optimism regarding the lawsuit. Voicing his belief that the case would end in 2022, he said,
“Clearly we’re seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications.”
Ripple vs. SEC Drama Update: Parties Have Three Days Left to Supplement Their Arguments
Renowned corporate lawyer James Filan shares an order from the U.S. magistrate judge crucial for Ripple case.
Both Ripple Labs Inc. and the U.S. Securities and Exchanges Commission (SEC) should provide additional arguments to supplement their positions in three days.
New legal briefs should be filled before Dec. 8, 2021
According to the scanned copy of a document shared by Attorney Filan, U.S. Magistrate Judge Sarah Netburn has issued an order that asks Ripple Labs Inc. and the U.S. SEC to “simultaneously” file letter briefs.
#XRPCommunity #SECGov v. #Ripple #XRP Judge Netburn orders the parties to file supplemental briefing on Deliberative Process Privilege in light on recent Second Circuit case. https://t.co/KojVb9SOQZ pic.twitter.com/HCYJYAtwuW— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) December 3, 2021
The briefs should be filed before Dec. 8, 2021. New papers should supplement the parties’ arguments regarding Ripple’s latest motion to compel.
These supplemental briefings should be filed as Deliberative Process Privilege.
Mr. Filan’s audience is certain that the obligation to provide new briefs was hotly anticipated and should be interpreted as a small win for Ripple.
“The law change slightly favors the SEC”
At the same time, attorney Jeremy Hogan shares that this extraordinary document (“law change”) favors the position of the Securities and Exchange Commission.
However, commentators should wait for the release of new briefs, Mr. Hogan concludes. He compared the court order to the behavior of a “daddy” who changes his child’s bedtime.
As covered by U.Today recently, the SEC accuses Ripple Labs Inc. and its key officials, Brad Garlinghouse and Chris Larsen, of offering illegal securities to U.S. citizens in the form of XRP tokens.
This year-long legal battle highlighted many crucial questions regarding crypto regulation in the U.S., such as the status of crypto tokens and securities.
Will This Move By The Court Turntables of Ripple’s Stance Against The SEC?
XRP has fallen prey to the global crypto market crash alongside other digital assets, which has left the entire space trembling. The crash has resulted in the industry shedding the market cap by 15.1% at $2,330,560,166,406. Traders and hodlers from the crypto town have been expressing concerns over the crash. As the target of $100,000 for BTC seems out of reach.
Which could persuade altcoins to embark on a massive rally towards the alt season. Another bummer for the XRP community seems to be around the block. As the court of appeal has ordered the parties to file supplemental briefing on Deliberative Process Privilege. Meanwhile, an XRP whale withdraws 150 million XRP from Binance into a private wallet.
XRP Enthusiasts Need To Be Vigilant This Coming Week!
Judge Netburn orders the parties to file a supplemental briefing on Deliberative Process Privilege in light of the recent second circuit case. The order states that on November 29th, 2021, the court of appeals issued a decision addressing the scope of the deliberative process privilege.
In light of the decision by December 8th, 2021, the parties shall simultaneously file letter briefs. No longer than three pages to supplement their arguments concerning defendants compel. The attorney cites that since the law has changed, the parties are being given a chance to re-brief as per the new law.
He further mentions that DPP is important as to whether the SEC has to provide certain internal communications. About digital assets and whether they are securities. The attorney believes the law change to slightly give the SEC an upper hand. The increase in updates regarding the lawsuit has influx curiosity in the space.
Will This Be A Turning Point in The Legal Tussle?
The 8th of December also sees a hearing of Chief Executive Officers from platforms across the industry. The CEOs of the firms will be witnesses in the hearing scheduled on the 8th of the month. Sources suggest that the witness list includes the following delegates.
- Jeremy Allaire, CEO of Circle Pay.
- Sam Bankman-Fried, CEO of FTX U.S.
- Brian Brooks, CEO of Bitfury Group.
- Chad Cascarilla, CEO of Paxos Global.
- Denelle Dixon, CEO of Stellar development foundation.
- Alesia Haas, CEO of Coinbase Inc, and CFO of Coinbase Global Inc.
On the other hand, U.S Senate Banking Committee Ranking Member Toomey had expressed disappointment. In the SEC chairman Gary Gensler’s response to the request of Senator for public guidance revolving around cryptocurrencies. The chairman’s response did not answer the cryptos the SEC views as securities and which it views as commodities.
Collectively, the protocol has been rising despite the odds. According to sources Bitrue cryptocurrency exchange is launching XRP ledger Nerian. An XRP whale withdraws 150 million XRP from Binance into a private wallet. Hopefully, the legal tussle prevails in favor of Ripple with the start of 2022.