3 Ripple-Related Events that Happened Last Week

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One of the top news stories of the past year is the continuing Ripple-SEC lawsuit, wherein the U.S. Securities and Exchange Commission (SEC) is accusing Ripple and two of its executives of selling unregistered securities.

In other words: the SEC is trying to treat XRP as a security.

However, Ripple is fighting back. Over the week of July 18, 2022, three new developments in the SEC v. Ripple saga introduced new headlines.

SEC Rejected XRP Holders Helping Ripple

In legal terms, an amici curiae is an entity who is not party to a lawsuit but has a strong interest in the outcome of a case. Such parties are often allowed to enter the discussion by filing amicus briefs that shed light on the case for the court to consider.

In Ripple’s case, Ripple attorney John E. Deaton has 3,252 affidavits signed by 1,746 XRP holders stating that they have been victimized by the SEC’s case against Ripple. Unfortunately, Cointelegraph reports the SEC wants to block those affidavits from being entered into the court records.

Amici curiae is a Latin phrase that means “friend of the court.” If the SEC succeeds in having those affidavits thrown out, that will effectively leave the U.S. District Court Southern District of New York, and Ripple, without any friends.

The deadline for XPR holders and Deaton’s reply is July 25, 2022.

U.S. Congressman Weighs in On SEC v. Ripple

At a hearing held by the U.S. House Committee on Financial Services, Representative Brad Sherman (D-CA) accused the SEC of overlooking crypto exchanges that allow XRP trading. The Congressman wants the SEC to get tougher on the trading of XRP and shut it down completely. However, the law has not determined that XRP is a security. Rather, the SEC lawsuit seeks to define the cryptocurrency as a security, putting it within their jurisdiction. 

There are two ways the XRP can legally be determined to be a security. One of those is the case appears before the U.S. Supreme Court, who then rules that XRP, and perhaps other cryptocurrencies, meets the definition of security under current U.S. laws. The other is an act of Congress passing a law that clarifies which cryptocurrencies are securities and which ones may be classified otherwise.

Thus far, neither of these have occurred.

Why Hasn’t the SEC Gone After Ripple Co-Founder Jed McCaleb?

The third incident is Ripple Co-Founder Jed McCaleb completing his 8-year sell off of XRP. CoinSpectator reports McCaleb earned $2.56 billion from XRP sales, which some say could be in violation of the Securities Act. 

McCaleb was awarded 20 billion XRP in 2012, just before leaving Ripple, and began selling it in 2014. Since then, McCaleb has accumulated billions of dollars in selling his XRP.  Interestingly, he is not listed as a defendant on the Ripple case -- but Chris Larsen and Brad Garlinghouse, both of whom have served as CEO of Ripple, are.

This ongoing saga between the SEC and Ripple is being watched by millions of crypto enthusiasts around the world and could determine whether other cryptocurrencies fall under U.S. securities regulation. Garlinghouse has threatened to take Ripple out of the U.S. if the company loses against the SEC.

 

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