- The U.S. SEC has been seeking disgorgement against a non-party entity which could have greater implications.
- The court has agreed to a hearing on January 30 which could be a defining moment in the Ripple vs SEC battle.
It’s been two years exactly now since the U.S. Securities and Exchange Commission (SEC) slapped a lawsuit on blockchain startup Ripple for violating securities laws during its XRP sale in 2013.
Throughout 2022, Ripple and its lawyers have been defending their stand strongly in multiple court hearings. The San Francisco-based blockchain startup has registered a few micro wins when it comes to getting access to the old SEC documents.
As the summary judgment approaches fast, the Ripple vs SEC case gets more and more fascinating. Both – the defendants and the prosecution – are trying to keep their comments in court. Also, the SEC claims that Ripple sold its XRP illegally, but hasn’t produced any substantial evidence.
As per the latest development, John E. Deaton, the lawyer representing Ripple in this case has noted that January 30 hearing would be one of the most-important hearings for Ripple. This relates to Ripple’s ally LBRY who’s been granted permission for hearing an oral argument of its motion in order to limit SEC’s accesses. The courts have acknowledged the requests by LBRY and have accepted to hear the arguments. Lawyer Deaton believes that this could be a defining moment in Ripple’s battle with the SEC.
The January 30th hearing regarding @LBRYcom’s Motion to Limit the SEC’s Remedies is arguably the most important crypto hearing to date.
The SEC is seeking disgorgement from a non-party but also read the SEC’s proposed language for the permanent injunction. 👇 https://t.co/g6Bi0DdjYP pic.twitter.com/xpLsD1hI5x
— John E Deaton (@JohnEDeaton1) December 28, 2022
A look into the SEC’s demands
The attorney noted that the U.S. SEC has been seeking disgorgement against a non-party entity which could potentially have greater implications and set a bad example. Additionally, lawyer John E Deaton also highlighted the intentions of the SEC which proposes a permanent directive that might allow the SEC to reach the secondary markets and disallow transactions. Besides, Deaton also called out the SEC for seeking inappropriate punitive disgorgement.
The SEC’s battle with Ripple has seen multiple twists and turns. The U.S. Securities and Exchange Commission (SEC) has been on a backfoot when it comes to disclosing the documents of Hinman’s speech. In its recent filings, the SEC said that they are still not ready to release Hinman’s documents to the public. The securities regulator noted:
The SEC respectfully maintains that the Hinman Speech Documents are protected by privilege. But if these documents were to become part of the public record, the SEC would be foreclosed from making any such argument in the future (on appeal in this litigation or in other litigation), which would be highly prejudicial to the SEC.
In another development, Ripple gains an edge over the U.S. SEC as the U.S. DoJ recently classified digital assets like MNGO and CRV as commodities and not securities. This might give Ripple the leeway to push the SEC to backtrack the demand for XRP being a security.