The SEC vs. Ripple case could end with a summary judgment on fair notice. If this were to come true, closure would be before even the close of discovery and it’s faster than expected.
The SEC v. Ripple case on Friday had a hearing on the SEC’s motion to pierce the attorney/client privilege of Ripple and its lawyers. The regulator wants Ripple Labs to turn over documents related to legal advice it received in 2012 prior to the sale of its token, XRP: whether the firm was legally required to be registered with the SEC.
The SEC claims that legal advice could be proof that the firm “reasonably understood” that the nature of XRP. If not subject to federal securities law then the company waived any privilege over those communications.
SEC attorney Jorge G. Tenreiro said Ripple’s lawyers knew what the law required and that it could be a security: “Their lawyers knew from the very beginning, and to now come and say to the court, “nobody knew”, and leave us unable to rebut that by showing all of the advice that they got, not just what they selectively disclosed to third parties, is fundamentally unfair and fundamentally against the fairness principle as recognized in this circuit.”
It was in late April, that the SEC filed the motion to dismiss Ripple’s “lack of due process and fair notice” defense that the XRP token could be deemed a security.
Ripple then filed its Memorandum of Law in opposition to the SEC’s motion to strike Ripple’s lack of due process and fair notice affirmative defense. The defendant pointed to SEC’s misrepresentations of the Judge and omissions.
During the hearing, it seems that SEC’s Jorge Tenreiro said that Ripple Labs wants to push for a Summary Judgement on its lack of due process and fair notice affirmative defense.
Attorney Jeremy Hogan reported that moment and suspects that Ripple Labs wants that hearing to happen even before the hearing regarding the nature of XRP, which could end the trial without that regulatory clarity, but with a precedent that would allow any future defendant in a similar lawsuit to claim they had no fair notice from the SEC.
“The SEC attorney let out that the Ripple attorneys told him that Ripple intended to file for Summary Judgment on its Fair Notice defense in August”, Hogan said.
“A Ripple victory at that hearing would of course end the whole case. Would XRP have “clarity” then? Yes and no. XRP’s status would not, but no one could be sued after that by the SEC because there would be case precedent that no one had Fair Notice anyways”, he concluded.
Given the lawsuit, XRP continues to gain adoption. Ripple has partnered with Egypt’s largest bank, National Bank of Egypt (NBE). The new deal will enable easy remittances to Egypt. The deal strengthens the blockchain’s presence in the MENA region. So far, the distribution ledger tech provider has presence in Oman, Kuwait, UAE, and now Egypt. Also, Ripple has a regional head office in the UAE’s financial capital, Dubai.
Seizing on this opportunity, Novatti Group joins Ripple’s global payment network tapping RippleNet’s On-Demand Liquidity (ODL) service — leveraging the digital asset XRP for instant, cross-border payments. Announced recently as part of a deal originally signed in December 2020, the digital banking and fintech company that specializes in delivering unique payment solutions is deploying RippleNet to make moving money faster, cheaper and more reliable for their customers.
XRP continues to be utilized given it’s solid use case and adoption. Given consistent news in favor of Ripple, the course of the trial seems to be leaning in favor of Ripple. My prediction is if Ripple can win the case, exchanges will re-list XRP en-masse allowing the cryptocurrency to gain in market capitalization against other crypto currencies in the top ten.