Ripple Labs vs. SEC: Battle Over XRP Enters New Phase with Scheduling Order
Magistrate Judge Sarah Netburn has set a new course for the Ripple vs. SEC case with a scheduling order. Ripple Labs challenges the SEC’s heavy penalties, advocating for a $10 million settlement. In recent developments, Magistrate Judge Sarah Netburn, following her appointment as District Judge, issued a new scheduling order in the ongoing lawsuit between [...]
- Magistrate Judge Sarah Netburn has set a new course for the Ripple vs. SEC case with a scheduling order.
- Ripple Labs challenges the SEC’s heavy penalties, advocating for a $10 million settlement.
In recent developments, Magistrate Judge Sarah Netburn, following her appointment as District Judge, issued a new scheduling order in the ongoing lawsuit between Ripple Labs and the SEC. According to a report by CNF, this order outlines deadlines for the SEC to respond to Ripple’s motion to dismiss expert submissions by April 29, 2024. Ripple will then have three business days to reply. This is a critical juncture in the case, signifying intensified legal proceedings.
Ripple’s Stance on Penalties and XRP Classification
As highlighted in today’s CNF YouTube update, Ripple Labs is disputing the SEC’s call for substantial civil penalties, proposing instead a more reasonable penalty of $10 million. Ripple contends that the SEC lacks evidence to support its claims. It argues that its On-Demand Liquidity (ODL) sales should not be classified as investment contracts.
Instead, they are used primarily to enable cross-border payments, which contradicts the SEC’s view of XRP as an investment. Ripple asserts no financial harm or risk of future violations has been demonstrated, referencing the Govil case to bolster their argument.
Public and Legal Perspectives on ODL
A vital aspect of Ripple’s defense revolves around the function of its ODL service. Ripple argues that ODL’s market sales are transactional, not investments, as XRP is held briefly—only a few seconds—to facilitate cross-border payments. This positions ODL as a tool for efficient transactions rather than an investment vehicle.
Legal commentator James K Filan highlighted this in a recent tweet, sharing details about the ongoing legal maneuvers around Ripple’s motion to strike new expert materials submitted by the SEC.
#XRPCommunity #SECGov v. #Ripple #XRP Magistrate Judge Netburn has entered a scheduling order regarding @Ripple’s Motion to Strike new expert materials the SEC submitted in support of its Motion for Remedies and Entry of Final Judgment. It is below. pic.twitter.com/BglOzE5pl4
— James K. Filan
(@FilanLaw) April 25, 2024
In discussions on social platforms like X, blockchain advocate Bill Morgan recently emphasized that ODL transactions should not be viewed as investment contracts. He explained that ODL customers are essentially engaging in a swift exchange of XRP for fiat to execute low-cost money transfers, not to invest in XRP.
Current Market Reaction
Amid these legal and regulatory discussions, XRP’s market performance has shown resilience. Currently, XRP trades at $0.5333, having risen by 1.23% over the last day and 10.24% over the past week. This uptick reflects a cautiously optimistic outlook from investors regarding the outcome of Ripple’s legal challenges.
These strategic legal defenses and Ripple’s firm stance against the SEC’s allegations are pivotal in shaping the future of XRP and its classification within the broader context of cryptocurrency regulations.
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