Judge’s Comments During SEC Hearing Could Be Favorable for Ripple: Unaffiliated Attorney
Attorney Jeremy Hogan, a partner at Hogan & Hogan legal firm, has pointed out some comments made by the magistrate Judge that may favor Ripple against the U.S. Securities and Exchange Commission (SEC).
Hogan observed the judge commenting in a virtual hearing over the SEC’s attempt to obtain personal financial information of Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen.
Judge’s Comments May See Ripple Come Out Triumphant
In a YouTube video, Hogan said Judge Sarah Netburn had interrupted the discussion to clarify a statement she felt was untrue.
Netburn is not the primary judge in the case; she is assisting District Judge Analisa Torres with discovery and mediation.
According to Hogan, Netburn gave the impression that Ripple’s XRP cryptocurrency may not be a security as the SEC claims. According to Hogan, the judge said,
“My understanding about XRP is that not only does it have a currency value, but it has a utility, and that utility distinguishes it from Bitcoin and Ether,”
Hogan, who is not in any way related to the case, said that the second comment Netburn made that was as striking as the first was questioning whether everyone who sold XRP was selling illegal securities.
This was based on the SEC’s prior argument. But the SEC lawyer said that only Ripple and its affiliates could be accused of selling the XRP as illegal securities under the regulator's Securities Act.
Hogan then surmises that the SEC lawyer's statement clears the way for cryptocurrency exchanges in the United States to possibly re-list XRP again with no fear of reprisal.
Others believe Hogan's argument doesn't hold much weight. One of them is popular trial lawyer Stephen Palley.
Palley believes that an “offhand comment” made by a magistrate judge in charge of mediation and discovery doesn't mean Ripple would win the case. On exchanges relisting XRP, Palley feels crypto exchanges like Coinbase and Gemini would be foolish to take such a stance in an ongoing case.
Ripple Having A Good Run So Far
Hogan said that Netburn’s comments are exactly what Ripple would want the court to think. He said,
“If I’m Ripple, I’d be feeling pretty good that my mediator and consulting summary judgment judge just said on the record what I essentially argued in my pleadings.”
The lawsuit against Ripple, filed in December 2020 as the former chair Jay Clayton vacated his position, alleges that co-founder Chris Larsen and CEO Brad Garlinghouse aided and abetted Ripple’s unregistered sales of securities in 2013 and 2015, respectively.
Ripple has responded, stating that it had never offered or sold XRP as an investment and that XRP holders do not acquire any claim to Ripple's assets, hold any ownership interest in Ripple, or have any entitlement to share in Ripple’s future profits. Following the SEC's lawsuit, numerous crypto exchanges came out hard on the company by delisting its XRP token.
Despite the backlash from businesses in the U.S, Ripple's Asian market continues to boom. The blockchain firm has partnered with a subsidiary of Japan's SBI Morningstar, which plans to pay its shareholders XRP tokens as dividends.