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District Court Judge Analisa Torres has rejected motions filed by the Securities and Exchanges Commission and the Ripple team on Friday.
Judge Torres Denies SEC Motion
The lawsuit filed by SEC against Ripple accuses the crypto company of trading the XRP token as an unlicensed security asset. Ripple has vehemently denied the claims and has been trying to prove in court that the XRP token is not a securities asset and is thus outside the SEC’s jurisdiction. One of the arguments presented in court by Ripple was it was not given fair notice that the financial regulator would consider XRP as a security. This proves that the company was not granted due process, and the team wanted to use the defense in court to win the case. However, in April, the SEC filed a motion to dismiss Ripple’s fair notice defense. On Friday, one of the rulings issued by Judge Torres denied SEC’s motion, thus affirming the viability of Ripple’s defense in court to fight the case.
Ripple CEO’s Motion Also Denied
Ripple CEO Brad Garlinghouse has openly rejoiced in the ruling, hailing it as a “huge win” for Ripple on Twitter. However, the case has yet to move on from the pleadings stage and could possibly go in either direction. Furthermore, Garlinghouse did not take into consideration that the judge had also dismissed a motion filed by the Ripple leaders. Both Garlinghouse and executive chairman Chris Larsen had filed a motion in April to dismiss the case against them for aiding and abetting the alleged unregistered securities sale. According to the duo, this motion would allow the case to be dismissed. However, the judge denied the motion and ruled that SEC did not have to prove that the individual defendants knowingly violated securities laws. Since this ruling, Team Ripple has moved to strike a report that dismisses the market performance of XRP.
Ripple Racks Up Favorable Rulings
Another significant win for Ripple came when the court ruled in favor of them with regard to the SEC’s emails related to the former SEC official William Hinman’s speech on Ethereum. The Ripple lawyers and team were able to convince the court that the emails were not privileged information as they were Hinman’s personal views, despite the SEC trying to convince the court otherwise.
There have been speculations that the case might be settled by November 18, 2022. Even though the case could still swing either way, the proceedings have mostly been favorable to Ripple so far. The team was able to prove that they tried to be compliant with the SEC years before the regulator even turned its gaze on cryptocurrencies.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.