The CEOs’ attorney James K Filan tweeted a copy of a letter filed by the SEC with the Southern District of New York.
Filan is representing former Ripple CEO Christian Larsen and current CEO Brad Garlinghouse in the suit brought on by the Securities and Exchange Commission (SEC). In the letter, filed by the SEC, the two sides inform the court that they have agreed on proposed dates for presenting arguments regarding the defendants’ motions to dismiss the case.
Specifically, they request that the court accept the following timeline. The opening briefs from the defendants would be due on Apr. 12, and the SEC’s on May 14. The defense would have until June 4 to reply.
These dates are only in regard to the motion to dismiss from the defendants. Those are, in essence, opening rounds, but they do give an idea as to the timeline that can be expected. And it is not a short one.
There is the possibility that the process could be settled out of court. In an interview in January, SEC Commissioner Hester Pierce pointed out that the SEC usually settles this sort of case out of court, in the end.
However, there is no guarantee that Ripple and the SEC will reach an out of court settlement this time. Even if it does, the timing of the hearings for the initial motion to dismiss show that it is unlikely to happen before summer 2021.
Ripple Under Fire
The SEC formally indicted the CEOs and Ripple itself in December 2020. The SEC charged Ripple with raising over $1.3 billion from the sale of unregistered securities, namely XRP. Larsen and Garlinghouse stand accused of raising a further $600 million from the sale of XRP.
The SEC’s position is that XRP is a security. Ripple Labs rebuffed the charges in January. In the rebuttal, Ripple claims that XRP functions pricewise in a manner similar to other cryptocurrencies. Moreover, XRP was recognized as a digital currency by the State of New York, as well as cleared by the Financial Crimes Enforcement Network (FinCEN) in 2015.
Since the SEC’s charges were filed on Dec. 22, Ripple has suffered on several levels. Many exchanges in the U.S. delisted XRP. Outside of the U.S., exchanges forbade Americans from trading in it. Corporate clients such as Moneygram, which relied on XRP for making cross-border transactions, ceased doing so out of regulatory fears. No matter how soon the SEC and Ripple sort out the matter, a lot of damage has been done already.