Ripple Labs might win the lawsuit filed by SEC after this major breakthrough

Read CoinChapter.com on Google News

Key Takeaways

• U.S. Magistrate Judge Sarah Netburn ordered William H. Hinman to sit for questioning, against great resistance from the US SEC.
• Mr. Hinman’s 2018 speech was the ‘the central question‘ for the judge.

NEW DELHI (CoinChapter.com) — Ripple Labs gained a significant victory in its ongoing courtroom battle against the U.S. Securities and Exchange Commission (SEC).

Latest court filings showed that Judge Sarah Netburn ordered the former SEC Director of Corporate Finance, William Hinman, to appear for a deposition on Monday, July 19. In December 2020, the SEC alleged that Ripple Labs conducted an unregistered security sale of its XRP digital asset.

SEC Motion Quashed

Ripple Labs’ legal team subpoenaed the former director for a deposition in June. However, the SEC filed a motion to quash it, arguing that the defendants (Ripple and its executives) could not justify the “exceptional circumstances” required to depose a high-ranking government official.

On Thursday, Judge Netburn ruled in favor of Ripple Labs, stating that the case was ‘not a run of the mill enforcement case by the SEC.‘ Moreover, the judge said that there is a considerable public interest involved in the case’s outcome. In addition, the judge also admitted that the SEC would probably instruct Mr. Hinman not to answer many of the questions.

During the hearing, Judge Netburn pointed out to the SEC that the former director’s testimony could be a turning point in the case. Interestingly, the testimony relates to a speech Mr. Hinman made during a Yahoo Finance Summit in 2018. In addition, the former SEC director had said that the offer and sales of Ether were ‘not securities transactions.’ Thus, the deposition may substantiate Ripple’s claim that XRP is not a security.

Also Read: Bad news for Ripple as US lawmaker moves to make SEC a crypto daddy.

Additionally, Judge Sarah Netburn asked the SEC why the finance regulator said that the deposition would breach privilege if it claims that Mr. Hinman’s speech reflected his personal views, not the SEC’s. In reply, the US regulator said that anything Mr. Hinman ever said is privileged as ‘deliberative.’ Moreover, it noted that the former director’s deposition would invoke deliberative process privilege.

Despite the ruling in favor of Ripple, the fintech firm’s counsel complained that the SEC is withholding internal memorandums citing privilege. Ripple’s counsel also highlighted that the SEC’s position is ‘untenable’ and biased against the defense.

The Ripple-SEC lawsuit might shift in favor of the blockchain firm with this decision.

Meanwhile, Ripple Price Trends

Ripple’s native cryptocurrency, XRP, slid by 3.60% on Thursday, reversing a 0.08% gain from Wednesday. XRP prices are going sideways as it fishes the bottom for some support.

The 50-Day (Violet), 100-Day (Green), and 200-Day (Yellow) Moving Average trendlines are above XRP’s price levels, highlighting the bearish trend in the short, mid and long term. Moreover, 50-Day and 200-Day MA lines seem to be forming a death cross, which may increase selling sentiment among investors. A death cross occurs when a short-term MA moves below a long-term MA trend line.

Also Read: A deadly death cross looms over XRP as SEC vs. Ripple lawsuit drags on.

The resistance for the digital asset lies at the $0.6205 price level. However, XRP required support from the market to break through the $0.62 levels. In the absence of an extended bull run, the resistance will likely cap any upside movements. If a breakout occurs, XRP will test the next resistance level of $0.6527 before any pullbacks.

Support for the token lies at the $0.5817 price level. If death cross fears lead to sell-offs, the next support level at $0.5626 will come into play.

At the time of writing, XRP was trading at $0.5970, down by 0.10% on the day.