Ripple Inc. Tells Court SEC Did Not Warn Market Actors about XRP’s Security Status
Ripple Inc. accuses the SEC of not warning crypto market actors such as exchanges that they believed XRP is a security – as late as 2019. The defendants maintain the crypto asset is not a security and are looking to dismiss the case.
In the Ripple-SEC pretrial held on Monday, Matthew Solomon of Cleary Gottlieb advocates, defending CEO of Ripple, Brad Garlinghouse, against a lawsuit with the U.S Securities Exchange Commission (SEC), stated the plaintiff did not warn any major market actors, including exchanges that XRP constituted a security in talks held in 2019 and previous talks.
Having confirmed both parties are not planning for any settlements soon, the SEC vs. Ripple case swiftly moved to pretrial where the defendants’ lawyers made some discoveries to the court. According to Solomon, the SEC, despite dealing with ‘ultra-sophisticated market actors including exchanges’ as late as 2019, did not tell them that XRP is a security.
This provides a strong foundation for the defendants, Brad and former CEO Chris Larsen, who has been accused of selling close to $600 million worth of XRP. SEC’s charge on the case is diminishing by the day, and they won’t be able to prove XRP is a security, Solomon further said,
“And, again, as this case moves forward, these facts will come to light, and it will be clear that SEC cannot establish and will not establish that XRP is a security.”
Brad’s and Larsen’s legal team also moved a motion to dismiss the case claiming their clients had no idea that XRP was a security or investment contract. In a joint letter with the SEC last week, Solomon and Paul Weiss’s Martin Flumenbaum, representing Larsen, confirmed they had filed a motion to dismiss the case against their clients.