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

XRP Lawsuit Update Today

The legal dispute between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has been ongoing for some time, and the two parties are now awaiting a Summary Judgment from the U.S. District Court.

The outcome of this pending ruling is expected to significantly impact the price of XRP, the native cryptocurrency of Ripple. Nevertheless, an attorney involved in the XRP lawsuit has proposed that a favorable ruling for Ripple could lead to a significant increase in XRP's value.

In a recent tweet, Crypto lawyer John Deaton shared his perspective on the ongoing SEC lawsuit against Ripple. According to Deaton, XRP has the most attractive risk-to-reward ratio among cryptocurrencies.

He also mentioned that a ruling from Judge Analisa Torres of the United States Southern District Court of New York is expected soon, possibly this week.

Deaton suggested that if the SEC wins the case, Ripple can appeal the ruling to maintain the status quo. The impact of the case on XRP's price is uncertain, but recent price movements suggest that investors are anticipating a favorable outcome for Ripple.

XRP gained over 17% over the weekend, and its daily trading volume has increased by more than 30%. Despite the uncertainty, Ripple executives expressed confidence in their legal team's defense, with President Monica Long remaining optimistic about reaching a positive resolution to the case. However, she also noted that an imminent ruling might be unlikely.

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 circulated. 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. Bill Hinman's famous statement is an example of how it relates to cryptocurrencies.

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.

Here is a timeline of the XRP vs SEC lawsuit:

• December 22, 2020: The Securities and Exchange Commission (SEC) files a lawsuit against Ripple Labs, its CEO Brad Garlinghouse, and co-founder Chris Larsen, alleging that they conducted an unregistered securities offering worth $1.3 billion through XRP.
• December 23, 2020: XRP's price drops by more than 50% following the announcement of the lawsuit.
• December 30, 2020: Ripple responds to the SEC's lawsuit, denying the allegations and stating that XRP is not a security but rather a digital currency.
• January 29, 2021: Ripple files a motion to dismiss the SEC's lawsuit, arguing that the SEC's case is fundamentally flawed and that the agency had failed to provide fair notice of its interpretation of the law.
• February 22, 2021: The SEC files an opposition to Ripple's motion to dismiss, arguing that XRP is a security and that Ripple had failed to register it as such.
• March 3, 2021: Ripple files a response to the SEC's opposition, reiterating its argument that XRP is not a security and accusing the SEC of selective enforcement.
• April 6, 2021: The SEC requests that the court allow it to access Ripple's communications with its lawyers, arguing that they were not privileged.
• April 19, 2021: Ripple files a motion to compel the SEC to produce documents related to Bitcoin, Ethereum, and XRP.
• May 7, 2021: The court grants the SEC's request to access Ripple's lawyer communications.
• May 30, 2021: Ripple files a memorandum of law in support of its motion to dismiss the SEC's lawsuit, arguing that the SEC has failed to prove that XRP is a security.
• June 14, 2021: The SEC files a letter requesting a conference with the court to discuss the status of the case.
• August 31, 2021: The court grants Ripple's motion to compel the SEC to produce documents related to Bitcoin, Ethereum, and XRP.

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.