Lily R.
Lily R.
Jan 13, 2023

SEC vs XRP Lawsuit Update Today, Who Will Win? (Updated)

#cryptonews#xrp
tl;drThe SEC vs XRP lawsuit is finally approaching an end, and the possibility of XRP winning the court case increases with every new announcement. Recent reports made by attorney James Filan have turned the page for XRP, and whales have moved 85 billion XRP tokens as a result of the whales being provoked. Keep reading to learn all about the XRP lawsuit update today.
SEC vs XRP Lawsuit Update Today, Who Will Win? (Updated)
SEC vs XRP Lawsuit Update Today, Who Will Win? (Updated)
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XRP vs SEC Lawsuit Update Today

The battle over the Himan speech documents and emails continues in the long-running SEC Vs Ripple lawsuit. So far, the commission has lost all its assertions about the documents. However, the SEC is still trying to keep them from being released to the public.

Ripple has mentioned in its latest filings that the disputed speech documents are judicial documents. So the XRP Lawsuit is moving toward the Summary Judgement with this existing dispute.

Charles Gasparino, a FOX Business journalist, mentioned in a tweet that the Coinbase crypto exchange is developing a strategy to survive a potential SEC regulatory crackdown over the digital asset industry. This includes brokers-dealer trading coins registered as securities.

However, this move comes as a much-anticipated Summary Judgment in the XRP lawsuit looms. This suggests that the SEC might force coins aside from Bitcoin (BTC) to register if they win the Ripple lawsuit.

He added that the crypto community would be motivated to see another bloodbath if the US SEC registered a win against Ripple in the XRP lawsuit. This would push the commission to implement tougher rules.

FOX Business Journalist noted that the SEC oversight would impact nearly every sector, including crypto exchanges. However, this would fulfill Gary Gensler, SEC Chair’s desire to force regulations on every aspect of the crypto industry.

John Deaton, a lawyer for XRP, stated that the SEC’s most important argument in the Ripple lawsuit deserves to be covered widely. He said that the XRP case is one of the most important non-fraud enforcement actions since 1946.

Deaton mentioned that the SEC has produced a strong general argument in the case, comparing software sales to XRP sales to fund Ripple’s business activities.

What Is Ripple?

The names Ripple and XRP are often used interchangeably. However, it is not technically correct to do so; they are inherently different entities. The main differences between XRP and Ripple are:

  • XRP has been one of the largest cryptocurrencies by market cap since it first came into circulation. The key to XRP’s success is that, unlike most crypto projects, its purpose is to optimise the existing financial system rather than overthrow it. This is the primary reason why XRP is referred to as banking crypto. 
  • Ripple is a finance organisation that leverages XRP for its operations. These operations include interbank and cross-border payments and provide similar services for financial institutions. Nearly 100% (99.8%) of XRP’s total supply (100 billion XRP) was allocated to Ripple. The founders of Ripple have received around 20% of this amount. 

The Ripple members who are most involved in SEC vs XRP lawsuit are Ripple’s co-founder Chris Larson and Ripple’s CEO, Brad Garlinghouse.

Who Is SEC?

The Securities and Exchange Commission (SEC) is an asset regulator in the US. 

Fun fact: The SEC was created after the 1929 Wall Street crash that is infamous for causing the great depression.

The SEC is focused on the exchange of securities. It is responsible for subjecting securities to strict regulations for “investor protection”. Some examples of securities subjected to these laws and regulations are stocks, bonds, and in some cases, cryptocurrencies.

According to the SEC, each asset can be classified as a security if it meets all four Howey Test criteria. These criteria are:

  1. An investment of money
  2. In a common enterprise
  3. With the expectation of profit 
  4. Coming from the efforts of a third party 

Why Is The XRP vs SEC Lawsuit Happening?

The fourth criterion of the Howey Test is the most relevant criterion to cryptocurrencies. It essentially indicates that the expectation of profit comes from an identifiable individual or organisation.

In the case of cryptocurrencies, an individual or organisation can occasionally be identified and is creating an expectation of profit from investing in that coin or token.

The SEC categorises cryptocurrencies that fit all four criteria as securities and enforces them to strict terms and regulations. An example of how it relates to cryptocurrencies is Bill Hinman’s famous statement.

Bill Hinman is the former director of SEC’s Corporate Finance Division, and according to his statement, 

“ETH is not a security because it is “sufficiently decentralised.”

It means it is nearly impossible to identify which individuals or organisations are creating expectations. 

The SEC sued Brad and Chris in December 2020 and claimed their sales of XRP were illegal because XRP is a security. The SEC claimed that Ripple had illegally raised around $1.4 billion by selling XRP in violation of investor-protection laws. In contrast, its co-founder and CEO, who have also been sued, had harvested hundreds of millions of dollars in trading gains.

Why Is XRP Likely to Defeat The SEC Lawsuit?

Currently, the SEC vs XRP lawsuit is showing encouraging signs of a favourable endgame for Ripple. If Ripple wins the lawsuit, it will likely cause a massive boost in XRP’s price action.

In mid-October, Judge Torres permitted Ripple to present two Amicus Briefs, even though the SEC had opposed the move. Attorney Jeremy Hogan announced on Twitter suggesting Ripple’s superior edge in the XRP court case.

On Oct 15, Brad Garlinghouse made a tweet calling out the SEC. He claimed that the regulators have “shown no concerns for companies or individuals that its lawsuit against the XRP token would harm”.

What Happens After XRP vs SEC Lawsuit?

There are two scenarios following the SEC vs XRP lawsuit: XRP will either win the legal battle or lose it!

  • If Ripple loses the lawsuit, it is likely that Ripple’s staff to move the business to another country. In July 2022, Brad announced that the Ripple company would leave the US if it lost the lawsuit against SEC. The CEO is confident that Ripple would win against the regulators, as he stated:

“We think the law is on our side, and the facts are on our side, but we will move to another jurisdiction if we lose the case in the United States. We still have an immense business to build. Why do it in a regulatory jurisdiction that’s not going to be friendly towards us?”

  • Ripple winning the lawsuit would cause a surge in XRP’s price. The win has the potential to make the XRP price return to its All-Time High of $3.40. Recent XRP price predictions estimate that the XRP price could revolve around $3.81 by the end of 2025 if Ripple becomes the lawsuit winner.

XRP vs SEC Lawsuit Next Court Date

Brad Garlinghouse, Ripple’s CEO, has announced that the lawsuit could last another three to four months and would probably end in the first half of 2023. He has also revealed that Ripple would consider a settlement if the SEC agrees that XRP is not a security.

XRP Vs SEC Lawsuit Timeline

Find the XRP Vs SEC Lawsuit infographic in the following section.

XRP vs SEC Lawsuit Timeline
XRP vs SEC Lawsuit Timeline

Summary

The SEC vs XRP lawsuit is finally reaching its endgame after two years of struggle, and it seems that the winning tip is leaning towards Ripple.

Recent announcements by Attorney James Filan have caused an uproar amongst XRP investors, particularly the whales. The XRP Whales have moved $85 million XRP, and the coin’s 24-hour trading surged by 3%.

FAQ

Congrats! Now you know what the SEC vs XRP lawsuit is all about, and you have learned about the XRP lawsuit update today. While waiting for the final news about the XRP court case, let’s read and answer some frequently asked questions.

When Will XRP Lawsuit End?

The XRP lawsuit is likely to end sometime during the first half of 2023.

What Happens If XRP Is A Security?

If XRP is considered a security, its price will decline even more, causing it to fade away.

Can I Buy XRP After SEC Lawsuit?

While XRP funds would remain safely stored in the wallets after the trading suspension, users won’t be able to buy, sell, or trade XRP with other tokens.

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