Ripple and SEC case is nearing its conclusion after a 'summary judgment' was filed
September 22, 2022 10:06 PM
It was argued by Ripple that the "market forces of supply and demand" rather than an agreement between Ripple and XRP tokenholders were the source of XRP profits.
The SEC and Ripple Labs have both asked for a quick ruling on whether or not Ripple's XRP sales broke U.S. securities laws from a federal judge.
Both Ripple and the SEC have asked for a summary judgment in the case in separate filings with the U.S. District Court for the Southern New York District on Saturday.
A motion for summary judgment is filed when one of the parties believes there is sufficient evidence for the court to issue a ruling without a trial.
Both sides have asked Judge Analisa Torres to rule quickly on whether or not Ripple's XRP sales broke U.S. securities laws. Despite Ripple's claims that the SEC is out of arguments, the regulator remains convinced that XRP sales constitute a "investment contract."
On Saturday, Ripple CEO Brad Garlinghouse tweeted that the SEC "isn't interested in applying the law" in light of recent filings.
He claimed that they were trying to expand their jurisdiction far beyond what Congress had given them the right to do. "They want to remake it all," he said.
However, Ripple's general counsel Stuart Alderoty pointed out that the SEC "cannot identify any contract for investment" and "cannot satisfy a single prong of the High Court Howey test" "after two several years of litigation," he said.
Ripple argued in its summary judgment filing that the SEC's case "boils down to an impermissibly open-ended assertion of jurisdiction over any transfer of an asset."
Since there were no contractual obligations among Ripple and XRP tokenholders, the motion also argued that the SEC cannot prove that XRP tokenholders could not "reasonably expect profits" centered on Ripple's efforts.
However, the SEC argued in its own summary judgment motion that a "investment contract" can exist even in the absence of a contract, rights for the buyer, and duties for the issuer.
To counter this, Ripple argued in its motion that "that is not and should not be the law because without these essential features there is nothing to which the Howey test can sensibly be applied."
Instead, Ripple claimed that the company was successful due to "market forces of supply and demand," an idea that the SEC had "conceded," per the company's motion.
United States Attorney Jeremy Hogan tweeted on Saturday that "these concessions are perfect for a summary judgment," highlighting the importance of the admission.
Action from the community
The majority of the XRP community is optimistic following the filing of the motions by Ripple and the SEC, with one Twitter user declaring that "the end is near:"
After being sued by the SEC in December 2020 for allegedly raising $1.3 billion through unregistered securities sales of XRP, Ripple, former Chief executive Christian Larsen, and current CEO Brad Garlinghouse have now filed a motion to dismiss the suit.
If the judge grants the summary judgment, it will have far-reaching implications for deciding which digital currencies fall under the purview of U.S. securities laws.
After the filing of the motion, the XRP token's price jumped to nearly $0.40, a level not seen since July. Since then, it has fallen slightly, and is now trading at $0.34, according to CoinGecko.