The news comes as a relief to the Ripple community, which claims that the exchange medium can not be considered as a security.
US-based tech firm Ripple Labs has ticked off an additional win in a court battle with the US Securities and Exchange Commission (SEC). As Ripple braves a lawsuit alleging it of deceiving sponsors about its XRP cryptocurrency, the District Court Judge has rejected SEC’s proposal to repress the removal of the William Henchman, SEC’S Division of Corporation Finance.
In December 2020, the SEC filed a lawsuit against Ripple’s co-founder Christian Larsen and CEO Bradley Garlinghouse, alleging the company of forming a void in the market, enabling them to trade XRP with very restricted details. The agency maintained that Larsen and Garlinghouse enjoyed the maximum perks, making $600 Mn out of this venture. According to the SEC, both of them disregarded constitutional advice that the crypto-asset could also be deemed as an investment contract or security.
In a ruling by Netburn on Thursday, it’ll be possible for Ripple to depose SEC’s ‘high ranking officer’ William Hinman for a speech on the Ethereum network in 2018. In June 2018, Hinman had denied Ethereum’s decentralized infrastructure to be considered as security transactions. Ripple’s argument emphasizes the SEC’s conformed vision of the cryptocurrency over time, as well as capitalizing on the debate whether market competitors regarded XRP as a security.
About a month ago, the judge had pushed discovery sixty days back as appealed by the SEC. Statistics show that 96% of the total number of SEC cases are resolved before the hearing, with sixty percent before the actual legal action and ninety percent before the discovery. As the XRP faction withstood enormous pressure in the last few months owing to the unpredictability of the case, this news brings along a sense of relief for the group. The faction supporting Ripple is hoping for a quick conclusion to the case.
Thanks to the decision made by the judge, Ripple can implore Hinman to give evidence for his verdict on the Ethereum network in 2018 if there is no appeal by the SEC. Ripple can then interrogate Hinman on the same values and ideals, enabling him to utilize the same rationale to XRP. The real-time gross settlement system has asserted that the SEC should not control XRP as security only because it is a method of indigenous and global transactions.
In retaliating comments by the SEC, the agency battled the subpoena by claiming that the interrogation would put the top-ranking bureaucrats through dismissals. If there is any scheme or strategy they deliberated on or voiced their opinions about, which eventually diminished the purpose of an enforcement law, the process would end up in several depositions. Moreover, the regulator claimed that the SEC did not converse through its employees, but directly through the enforcement actions.