On Feb. 15 the SEC and Ripple filed a joint letter to the U.S. Southern District of New York federal court. It mentions there is currently no “prospect for settlement at this time.”
According to the SEC, settlement discussions have already taken place. Ripple, however, has retorted that these discussion happened “with relevant division directors who have since left the SEC.”
XRP Regulatory Status
The Ripple Labs legal team emphasized that XRP is not a security and functions as a currency. Appealing to the statement, Brad Garlinghouse and Christian Larsen, who are individual defendants before the court, claimed that the SEC does not have jurisdiction over the token.
But allegedly selling more than $1 billion of XRP doesn’t fall under the category of operations with privately issued currencies. Despite the fact that Ripple never registered XRP with the SEC, the regulator now feels it should be considered a security. Meanwhile, accused Ripple executives remain adamant that the token is a commodity similar to Bitcoin (BTC).
Legal proceedings between the SEC and Ripple appear to be ongoing, as both parties have yet to reach a consensus. The regulator continues seeking to amend the regulatory status of XRP, noting it is “proper under these circumstances.” However, the council for Ripple insists that the SEC’s invasive request is “improper and lacks legal foundation.”
The Powder Keg
Ripple still hopes that the new Biden administration will be more lenient toward the firm. Back in early January, Garlinghouse admitted that although their attempts to settle regulatory charges fell through, nothing has been set in stone.
Meanwhile, Gary Gensler, who was tapped as the SEC chief in mid-January, previously highlighted that there was a “strong case” for XRP to be regarded as a security under U.S. law.
In addition, the company also faces a new motion from Bradley Sostack. Sostack is the lead plaintiff in a class-action suit that is attempting to force Ripple to produce all email communications with the SEC for transparency purposes. Sostack also wants to reveal previously redacted information from Ripple documents related to the case.
A court hearing on the motion has been scheduled for March 25, 2021. Seeing that XRP holders have been left in limbo, we could expect to see even more motions be filed against Ripple in the meantime.
An initial pretrial related to the SEC’s charges will take place on Feb. 22, 2021, with the case itself expected to conclude by Aug. 16, 2021.