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A federal judge might soon be deciding over the lengthy court case the U.S. Securities and Exchange Commission (SEC) started against Ripple Labs in December of 20220.
Both parties have now filed motions asking Judge Analise Torres of the Southern District of New York to make a swift ruling, based on accompanying documents.
Ripple Labs, its CEO Brad Garlinghouse and Chairman Chris Larsen were sued by the SEC almost two years ago over its native XRP token, which allegedly violated federal securities laws. The defendants have always upheld that its sales and trading of XRP did not touch the principles of the Howey Test, a Supreme Court case that has become guiding doctrine over the past decades as to decide what passes as a security and what not.
Over the past two years, motions have been filed by both parties, mostly technical of nature on whether something should be allowed as evidence in the case, without really touching the core issues.
According to the SEC, it is evident that Ripple knowingly sold XRP with the promise of a increase in value of the tokens. The filing explained:
“Ripple publicly touted the various steps it was taking and would take to find a ‘use’ for XRP and to protect the integrity and liquidity of the XRP markets.”
Ripple, on the other hand, state in their motion filing that there has been no communication between them and customers buying XRP, and that there was no common enterprise, something that the Howey Test showed is one determinant of a security. The filing said:
“Even if the SEC were to engage in a belated, post-discovery transaction-by-transaction analysis to identify XRP offers and sales with contracts, its claim would still fail as a matter of law. Not one of those contracts granted post-sale rights to recipients as against Ripple or imposed post-sale obligations on Ripple to act for the benefit of those recipients.”
Two weeks ago, Jeremy Hogan, an attorney that has been following the Ripple vs SEC case from close, predicted that the legal matter could be resolved before the end of the year with both parties agreeing to settle.