Yerevan (CoinChapter.com) – The US Securities and Exchange Commission (SEC) is grasping at straws to win the lawsuit it filed against Ripple labs back in Dec 2020.
The law enforcement agency accused the San Francisco blockchain startup of cheating the US public by selling $1.3 billion of its native XRP token as unregistered securities. It later amended its initial stance, claiming that Ripple cheated “public investors across the world.”
However, Ripple refused to back down. The company on Wednesday filed a motion wherein it requested foreign third parties (offshore exchanges: iFinex, Noah Trade, BGH One, Bitlish, BMXDM Technology, and others) to assess XRP’s status with assistance from local regulatory authorities of Singapore, South Korea, Cayman Islands, Hong Kong, United Kingdom, Malta, and Seychelles.
When SEC filed the said lawsuit, they deemed XRP securities. However, Ripple lost no time in accusing the agency of extreme bias. They pushed the notion that the SEC has no grounds to single out XRP from all the digital coins.
Magistrate Judge Sarah Netburn granted Ripple access to the SEC’s internal documentation concerning cryptocurrencies. Should those documents reveal Bitcoin or Ethereum mentioned as ‘currencies,’ the agency expects to have a tough time continuing the prosecution.
A New Leverage for SEC
Sensing a weakening in the prosecution, the agency requested an extension on both fact and expert discovery by 60 more days.
Defense lawyer James K. Filan tweeted about this request. In the comment section, he stated, that a governmental agency requesting such an extension is unorthodox, given the extended period of the investigation (2.5 years) before filing the lawsuit.
As formulated in the request: “Defendants do not consent to SEC’s request, because they contend that SEC had sufficient time to investigate this matter before filing suit.”
However, the agency disagrees, stating that “Ripple suffers no cognizable prejudice from a 60-day discovery extension”. Judge Netburn has yet to grant or deny the request.
Prior To The Latest Motion
The SEC prosecutors recently filed a motion to gain access to Ripple’s internal documentation. The document contains legal advice that the startup received on whether or not the initial XRP offering was compliant with US investment laws. Magistrate Judge denied the motion, giving Ripple a significant win.
Legal commentator Clive Brabin asserted the importance of the ruling.
Judge Netburn’s ruling here could well be the key moment throughout this whole action. It’s a very important point and one which now places a great deal of emphasis on the fair notice defense, which could yet make or break this whole case.— said the commentator.
The “fair notice defense” in the citing above concerns the fact, that despite the lengthy investigation that the SEC conducted, they never issued a warning before filing the lawsuit. The commentator also stated that the law enforcement agency has “hit a brick wall” when it comes to obtaining Ripple’s internal documents.
… traded at $1.06 in the European session Thursday, approaching its 20-day exponential moving average (EMA-20: blue wave). The token gained 3 percent in the last 24 hours.
The $1.03 margin has proven significant in the past two months, both as resistance and support. If XRP manages to maintain the current bullish bias, it might use the margin for additional support to get back up above the EMA-20. Should Ripple have more wins in the courtroom, XRP could continue its ascend.
After the lawsuit was initially filed, Ripple saw a long line of see-saw wins and losses. However, the latest development seems to have turned tables in the company’s favor. The final outcome of the lawsuit is not yet clear. However, Judge Netburn’s final ruling will help clarify the laws involving cryptocurrencies either way.