Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Ripple Lawsuit Update: Settlement Inevitable?

CryptocurrencyJul 21, 2021 09:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
Ripple Lawsuit Update: Settlement Inevitable?

  • Ripple is in the middle of a lawsuit with the SEC, which claims XRP tokens should be considered a security.
  • Judge Sarah Netburn has agreed to depose the SEC’s former Director of the Division of Corporation Finance, William Hinman
  • Hinman claimed in 2018 that Ethereum and Bitcoin are not securities because of their decentralized nature.
  • The SEC, through Jay Clayton, brought the case against Ripple a day before he left office.

Ripple has been slammed with a lawsuit putting the spotlight on the entire crypto sphere. Regulatory pushback has become apparent as Bitcoin and other cryptocurrencies are inching closer towards the mass audience. The SEC filed a lawsuit against Ripple in December 2020, claiming the company sold unregistered securities in the US, whilst claiming Ethereum and other cryptos are not securities due to their decentralized natures.

Ripple Holds the Smoking Gun

According to Ripple’s lawyer, James Filan, the company sought to depose former SEC employees who have left the SEC in the past months. While the SEC filed a motion to quash after “objecting to the deposition,” Judge Sarah Netburn has “ordered” the deposition of Williman Hinman, the former Director of Division of Corporation Finance, William Hinman.

The SEC argued that Hinman’s deposition would create a precedent by deterring other layers from joining public servant jobs. However, Netburn argued that “This is not a run-of-the-mill SEC enforcement case,” highlighting Hinman’s deposition will “open the floodgates” for all government officials who have spoken about securities or crypto.

Both the SEC and Ripple filed to “work out their differences and elected to allow Judge Sarah Netburn to decide. Hinman’s deposition was initially scheduled for July 19th; however, his declaration has been postponed until both parties’ scope of the testimony is clarified.

On The Flipside

  • XRP has been delisted from all major exchanges as they fear being liable for listing an unregistered security.
  • A victory during the deposition does not mean winning the entire case but rather one battle.
  • The price of Ripple has dropped by 70% since its year high of nearly $2.

Hinman: Ripple’s Way Out

During a 2018 Yahoo Finance All Markets Summit, William Hinman, then former Director of the Division of Corporation Finance at the SEC, declared Ethereum does not warrant being considered as a security. Furthermore, he stated that Ethereum’s decentralized nature is a reason not to consider the token a security claiming

"...Ethereum network and its decentralised structure, current offers and sales of Ether are not securities transactions." Lawyers argue that Ripple is comparable with Ethereum as the network operates on a similar decentralized structure, adding that, disclosing

"federal securities laws to current transactions in Ether would seem to add little value." As a result of the current claims, Ripple is avoiding allowing Hinman to testify in open court.

What’s more, XRP holders have accused Hinman of a conflict of interest due to his affiliation with the Ethereum Alliance. However, the testimony could be the catalyst to pivot the SEC’s claims and disallow the introduction of the Howie Test. With that in mind, XRP could further convince the court that it holds similarities with Ethereum and other cryptocurrencies, which are not investigated as failing to be declared a security.

While the XRP vs. the SEC case might be ending in the pre-trial settlement, the article indicates 96% of SEC lawsuits are settled before trial. Still, if Ripple loses the lawsuit, Brad Garlinghouse highlighted the company is ready to progress without SEC approval as Ripple continues to be used outside the US.

EMAIL NEWSLETTER

Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7] You can always unsubscribe with just 1 click.

Continue reading on DailyCoin

Ripple Lawsuit Update: Settlement Inevitable?
 

Related Articles

Coin Healthcheck: NULS
Coin Healthcheck: NULS By DailyCoin - Dec 07, 2021

About NULS is the token of Nuls.io, an enterprise-grade blockchain infrastructure that offers a modular microservice-based framework aimed at helping to make dApp...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email