As the SEC pushes for foreign regulators to join forces against Ripple, the case is likely to take a different stance before the final ruling.
After the Securities and Exchange Commission (SEC) was directed to reveal its internal documents on crypto communications in a pre-trial ruling against Ripple and the top management earlier this month, the regulator has now changed tactics to counter the defendant. According to a joint letter to US Magistrate Judge Sarah Netburn filed on April 16, the lawyers representing defendants noted that the SEC was pursuing discovery outside the scope of the Federal Rules and the Hague Convention by improperly leveraging Memoranda of Understanding (“MOU”) with foreign regulators.
“The SEC’s MOUs with foreign powers represent an extraordinary tool to which private litigants like Ripple, Mr. Larsen, and Mr. Garlinghouse have no equivalent and which has no place in litigation. And it represents an end-run around the Court’s authority to oversee the extent of foreign discovery necessary in the litigation,” the defense lawyers wrote.
Bigger Picture on SEC and Ripple Legal Litigations
This comes even after the defendant thought the incoming administration led by Gary Gensler would lean in their favor by dropping the lawsuit. The SEC as a regulator seeks to maintain its credibility as losing such a case could damage its countenance. “Once the SEC decides to move forward with a high-profile enforcement action, it would be embarrassing for them to back down without some sort of victory. I expect them to continue to pursue their claims against Ripple with zeal,” noted John Wagster, an attorney at Frost Brown Todd.
Meanwhile, XRP market price kept pumping despite the lawsuit’s unpredictable outcome. According to metrics provided by CoinGecko, the XRP market price was trading around $1.40 having jumped approximately 9.2% in the past 24-hours. Notably, XRP price has added over 620% in the past 12 months and jumped nearly 200% in the past month.
Ripple has been accused of pumping XRP price amid the ongoing legal litigation. However, the firm has distanced itself from the claims. Market pundits suggest XRP prices have been responding to the global market demand. As the cryptocurrency market is prone to speculation, traders are betting on Ripple to win the case. Besides, as more novice traders join the crypto industry, the possibilities of uninformed trading remain a huge factor in XRP’s recent pump.
As the SEC pushes for foreign regulators to join forces against Ripple, the case is likely to take a different stance before the final ruling. “The SEC is going to foreign regulators and requesting documents re Ripple’s business partners. The foreign governments then request documents from those partners. This places regulatory pressure and burden on Ripple’s foreign business partners,” said Jeremy Hogan, a partner at law firm Hogan & Hogan, in a tweet. “This is NOT something a ‘typical’ Plaintiff could do and it’s not fair, so Ripple is calling dirty-poker.”