SEC to back off of Ripple? Judge orders discovery

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Brad Garlinghouse

 

 

 

As Samuel Wan notes in NewsBTC coverage this morning, it’s a good day for Ripple – CEO Brad Garlinghouse himself has said so, in a tweet contemplating the various ways that things have broken for XRP as the U.S. Securities and Exchange Commission’s case continues to unravel.

 

The SEC is bringing charges that top brass at Ripple are responsible for selling unlicensed and unregistered securities. However, the general rank-and-file of crypto enthusiasts are asking how this can be when XRP has so many similarities to other blockchain digital assets like Bitcoin and Ethereum that have not been similarly targeted.

“Ripple’s … argument is that the SEC is overstepping its boundaries by claiming that XRP is a security,” writes an unnamed blogger at Shrimpy in a blog post describing some of Ripple’s most common defense points. “Before the lawsuit, no other regulatory jurisdiction in the world has marked XRP as a security, nor have they stated that Ripple must do so. The document also claims that the currency’s design is incompatible with securities regulation and that it would negatively affect the project’s central utility and purpose.”

The reality that XRP had long been considered a runner-up to Bitcoin and Ethereum doesn’t help the SEC, either. Certain flashpoints of the case hinge on whether XRP is said to have a unique utility on the market, and how to characterize its token.

 

Now, Judge Sarah Netburn, whose court is handling the case, has ruled that the SEC needs to turn over internal documents showing how the agency has regarded Ripple compared to Bitcoin and Ethereum.

 

That’s leading skeptics of the SEC’s case to consider that there may be a “smoking gun” document somewhere in the mix, as Jeremy Hogan, a source in the NewsBTC story, considers:

 

“If there is a smoking gun type document out there, in the next 30 days is when the SEC will look to get out of this litigation,” Hogan reportedly said. “This also conforms with Gensler getting on board, so if that is going to happen, look for that sometime in mid-May.”

 

Meanwhile, XRP has vaulted back over contending coins like Cardano and Polkadot, reclaimed value back in the one-dollar range, and is now being considered for relisting at some of the major exchanges that dropped XRP following the SEC’s initial challenge.

 

Many are suggesting that this defeat of the SEC will force government agencies to take a more realistic approach and a clearer, more clarified method when it comes to handling cryptocurrencies. We’ll see.

 

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