Ripple and SEC Confirm A Settlement is Not in the Cards ‘Any Time Soon’
Former and current Ripple Inc. CEOs, Chris Larsen and Brad Garlinghouse, respectively, are planning a motion to dismiss cases against them. The case is expected to drag on – past the August 2021 prediction.
In a joint letter by Ripple Inc. and the U.S. Securities and Exchanges Commission (SEC) sent to Federal judge, Analisa Torres, at Southern District Court of New York, no settlement on their court case is set to occur any time soon. The joint filing further states the SEC and Ripple do not consent to conduct all further proceedings in the “securities law violation charges” case before the assigned Magistrate Judge.
It’s been a rollercoaster ride in the past two or so months for Ripple Inc. since the SEC opened security violation charges against the blockchain firm in late December 2020. The SEC claims the defendants sold and offered investors over $1.38 billion worth of XRP, which they consider a “security,” and hence needed registration by the SEC.
Moreover, the SEC further claims former Ripple Inc. CEO Chris Larsen and current CEO Brad Garlinghouse also sold their XRP as “investment contracts” pertaining to security. The securities regulator also claims that the company falsely termed XRP as a currency. The SEC is looking for ‘permanent injunctions’ and civil penalties if the defendants are found guilty.
On its hand, Ripple has vehemently denied any reports of selling XRP as security – maintaining it is a “digital asset” controlled by market factors similar to Bitcoin, Ether, and other cryptos.
To this end, the plaintiff and defendant have written to a federal judge confirming any settlement prospects are not in sight. The joint letter reads,
“Counsel for the parties have met and conferred and, having previously discussed settlement, do not believe there is a prospect for settlement at this time.”
“However, the parties will promptly notify the Court if any settlement in principle is reached as to any Defendant.”
The letter further notes that the previous settlement agreements were made “under a previous administration” and “with directors who have since left the SEC.”
Larsen and Garlinghouse, termed as individual defendants, also wrote to the SEC informing them of their plans to move a motion to dismiss their case. The two Execs state they never claimed XRP to be a security, and the “SEC cannot adequately allege a violation of securities’ law” against them.
With all the back and forth, the case is set to wait a little longer before a definite court decision is made – the end of August being the earliest possible time. Ripple and the SEC agreed that “all discovery shall be completed no later than August 16, 2021,” but Larsen and Garlinghouse will have an additional 120 days to complete their discovery.
Ripple is hoping the new Biden Administration will follow a more lenient path in the case against the company, given the recent ‘crypto-savvy’ appointees to the U.S. government. Ripple is not only fighting its legal battles in court but in Washington, too – having contributed a joint $1 million together with Coinbase over the past year.