Ripple Pokes SEC After Its $50M Fraud Lawsuit Blunder With Debt Box

YEREVAN (CoinChapter.com) — The long-standing legal battle between Ripple, a leading digital asset company, and the U.S. Securities and Exchange Commission (SEC) has captivated the cryptocurrency community. Throughout the lawsuit, which has spanned over three years, Ripple has consistently challenged the SEC, achieving significant victories. As the case concludes, Ripple has strategically leveraged aspects of an ongoing SEC proceeding to strengthen its position.

Ripple Comments on SEC Debt Box Lawsuit

The SEC’s lawsuit against Debt Box, a case that has drawn significant attention, especially from the XRP community, involved the SEC filing to dismiss a controversial $50 million fraud lawsuit. This move came after the court, led by Judge Robert Shelby, threatened sanctions against the SEC for misleading the court to secure a restraining order and asset freeze against Debt Box.

The SEC admitted that its attorneys should have been more forthcoming with the court, although it argued that sanctions were unnecessary to address the issues raised.

This case has sparked widespread criticism of the SEC, with notable figures like John Deaton, who represents XRP holders, criticizing SEC Chair Gary Gensler for the agency’s conduct under his leadership.

The criticism extended to the legal tactics the SEC employed, suggesting a behavior pattern that disregarded truth and justice in its legal pursuits. The legal community, including attorneys Jeremy Hogan and Bill Morgan, voiced frustration with the SEC’s handling of cases, arguing that the agency prioritized winning cases over fairness and justice.

Ripple’s CTO, David Schwartz, also criticized the SEC for handling the Debt Box case. The executive highlighted the impact of the SEC’s actions on the market value of associated assets, which suffered significantly due to the lawsuit and subsequent actions.

What About SEC vs Ripple?

While the Debt Box case is unlikely to influence XRP news any time soon, the SEC vs Ripple case profoundly impacts the coin. The legal battle between the two continues, as investors hope the lawsuit will finally be resolved in April 2024.

Did You know? On Dec. 22, 2020, the SEC initiated a civil action against Ripple, Larsen, and Garlinghouse. The lawsuit claimed that Ripple should have registered the distribution of the digital asset XRP, dating back to 2013, as a security. The agency then withdrew allegations against both executives.

However, before a final ruling arrives, SEC and Ripple continue ‘bashing’ each other with motions. Here is the latest courtroom news and its possible effect on the XRP price.

Ripple has motioned to file a Sur-Reply. A Sur-Reply is not a standard part of legal proceedings but can be requested to address new arguments or evidence presented in a reply by the opposing party. This is an additional response to the SEC’s Motion to Compel.

In detail, the SEC had filed a Motion to Compel on Jan. 11, 2024, requiring Ripple to provide specific documents. These documents include post-complaint contracts governing XRP institutional sales and financial statements for 2022-23. Ripple opposed this Motion to Compel on Jan. 19.

Motives For a Sur-Reply

By filing a Sur-Reply, Ripple aims to present further arguments against the SEC’s Motion to Compel. The intention is to persuade the court to deny the SEC’s request for additional documents.

If Judge Analisa Torres grants Ripple permission to file this Sur-Reply, it could potentially prolong the litigation process, as the court might need more time to consider these additional arguments. The judge might also call for a court session to hear oral arguments about these motions before ruling.

The SEC vs. Ripple case is currently in its final stages, focusing on remedies-related discovery. Both parties must complete this phase by Feb. 12 and then file remedy-related briefs, with the SEC’s brief due by Mar. 13 and Ripple’s reply by Apr. 12.

Meanwhile, XRP dropped another 7% to $0.50 on Jan. 31, as CoinChapter predicted in the previous review.