Ripple (XRP-USD) holders may have started the week celebrating, but it doesn’t look like the company’s out of the woods yet. Rather, Ripple is still deeply embroiled in the lawsuit levied against it by the U.S. Securities & Exchange Commission (SEC). Sure, an earlier XRP lawsuit update may have indicated the end is in sight. However, reports now say Ripple is still facing adversity in court.
Ripple is now well over a year into its legal battle with the SEC. Beginning in late 2020, the government entity claims Ripple conducted an illegal security offering worth $1.3 billion. But the sale of XRP coins is purported by Ripple to have not been a security offering or initial coin offering (ICO) at all.
This legal battle is sure to lay the grounds for further government litigation over crypto projects. The crux of the SEC’s argument is that XRP is a security rather than a currency. Of course, Ripple denies these claims, asserting that XRP is a currency with a function. The company says its function is to conduct cross-border payments with little-to-no fee to the user.
Ripple’s argument is further supplemented by the company’s compliance with ISO 20022, a new standard language for international banking. The XRP crypto is one of the only digital currencies compliant with the standard. Many investors see this compliance as enough evidence that XRP is a currency rather than an asset.
Still, the case drags on. Ripple seems confident it can come to a close this year. Last week, documents surfaced suggesting that the trial will end between August and November of 2022, barring a settlement. However, news today suggests a closure will not be so soon.
XRP Lawsuit Update: Judge Denies Motions, Creates Setbacks for Ripple
Investors began celebrating an end to the trial over the past weekend, thanks in large part to news that a judge was denying a crucial SEC motion. However, a recent XRP lawsuit update suggests Ripple isn’t quite as far ahead as investors had thought.
Today, news is showing that both the SEC and Ripple have been denied important motions. The first half of this news — that the SEC had been denied a motion to strike Ripple’s fair notice defense — surfaced on Saturday. For context, Ripple’s defense posits that the SEC did not provide fair notice that its coin distribution was illegal. In April of last year, the SEC filed to strike this defense. When a presiding judge struck down this filing, it meant the case was progressing into a trial stage.
That had XRP crypto fans lofting the news as a huge deal. However, what these investors were not aware of was the judge also struck down a Ripple filing. The company filed its own motion in March of last year to dismiss the case. Still, CEO Brad Garlinghouse says that even if the lawsuit claims were true, they wouldn’t amount to a winnable case for the SEC.
It’s easy to understand why, with only one half of this news, XRP fans were ready to celebrate. If the judge were only striking down the SEC’s motion, it would seem likely for Ripple to win. However, with the full picture in view, it’s apparent that the case is only just beginning.