Joseph Hall, a former managing executive at the SEC believes that the SEC has a good chance of losing the $1.3 billion dollar lawsuit against Ripple Labs (XRP) based “on the merits” of the case. He also expressed reservations regarding what the SEC may envision as an ending to this case, as it is likely to have consequences beyond just Ripple (XRP) and may have massive implications for the entire cryptocurrency industry.
What is the SEC vs Ripple Lawsuit about:
The U.S. Securities and Exchange Commission’s lawsuit against Ripple Labs, alleges that the company itself along with it’s co-founders Christian Larsen and Brad Garlinghouse, did not notify the SEC regarding its initial sale of the token (XRP) in early 2013. They argue that securities fraud occurred and that the XRP tokens are unregistered securities.
Hall, who recently appeared on the Thinking Crypto podcast expressed empathy towards Ripples due process argument. This argument claims that Ripple was not provided with fair notice that their actions were deemed illegal even as they continued on since 2012. He also stated ““I’m not sure what the SEC is planning on proving through the XRP litigation either… I continue to be perplexed why the SEC decided to bring that case… Their entire regulatory project could be basically shut down they lose all their merits here, and I think there’s a pretty good chance that they will lose all the merits.”
Spectators along with the crypto and financial communities have remained divided over the credibility of the SEC’s allegations. Since the case began in 2020 there have been several twists and turns, some recent rulings have favored Ripple as it won a few key motions that may assist in proving the ‘fair motion’ defense. Also, the case has also grown in size as the 65,000 XRP token holders have joined the proceedings with attorney John Deaton. Hall Stated “It is pretty compelling that the investors themselves are showing a lot of unhappiness and concern here… Its something that could matter to the judge but I don’t think the anger of the XRP community is going to have any sort of deciding role in what the judge determines.”
A conclusion to the case is expected at some point in 2022 or 2023 the latest by most experts since the discovery phase is coming to an end in the next several weeks. If the 2 parties decide upon a settlement a 2022 conclusion would be more likely, however if the case continues on with litigation and appeals then 2023 would appear more likely.