Odds are the SEC will opt to settle Ripple lawsuit before reaching trial
Last week the SEC filed a motion to dismiss its securities and civil charges against the now-defunct cryptocurrency firm Ripple Labs Inc., and this week it received a green light from a San Francisco court. But the court did not dismiss the case entirely, and if it ends up going to trial, the odds are the SEC will opt to settle instead.
The Securities and Exchange Commission (SEC) has finally promised to settle an investigation into cryptocurrency firm Ripple Labs Inc. (XRP), with the agency set to reach a deal to end the legal battle over whether the company ever sold securities to accredited investors.
The very first decentralized application ever created was Ripple, and according to its creators, it was created to disrupt the way the world moves money. The only problem is to date, the SEC hasn’t agreed. This week the federal agency filed a motion to withdraw its case against the company, arguing that it could be harmful to the market if Ripple went to trial.
The Securities and Exchange Commission’s (SEC) lawsuit against Ripple is currently in the trial phase. The purpose is to enable each party to investigate the facts by obtaining evidence from the other party and others through inspection. According to attorney Jeremy Hogan, only a small percentage of cases make it to court due to lack of resources. This suggests that the SEC might try to negotiate with Ripple. On the other hand, given what’s at stake and how the discovery phase has generally favored the defendant, it’s not surprising that Ripple’s CEO wants to set a legal precedent with this case.
The mystery of the American legal system
Jeremy Hogan, a partner at Hogan and Hogan, while not directly involved in the Ripple case, has become an expert observer on the matter. Hogan gave his professional opinion on the finer points of the SEC’s allegations that Ripple sold unregistered securities for eight years. Yesterday, Mr Hogan announced that less than 10% of civil and criminal cases go to court. This is because the American legal system is incapable of handling a large number of cases. He added that judges, knowing this, usually pressure lawyers into settlements. A little secret of the American legal system: Less than 10% of cases can be handled by a court. Judges are constantly pressuring lawyers to settle cases because the reality is that if they had to try more cases, the system would collapse. There just aren’t enough resources. This applies to both civil and criminal cases, he tweeted. A little secret of the American legal system: Less than 10% of cases can be handled by a court. Judges are constantly pressuring lawyers to settle cases because the reality is that if they had to try more cases, the system would collapse. There just aren’t enough resources. This applies to both civil and criminal cases. https://t.co/cFCajnnz3e – Jeremy Hogan (@attorneyjeremy1) June 1, 2021
Ripple wants the case to go to court
When news of the lawsuit broke in late December, Brad Garlinghouse, CEO of Ripple, called it an attack on the entire crypto-currency industry. He also said that he and Ripple chairman Chris Larsen had the opportunity to settle the dispute. But given his powers of persuasion, he gave it up to make a point and pave the way for the rest of the crypto industry. Chris and I had a chance to set up separately. We can do it and it will all be behind us. Not done. That’s how sure Chris and I are that we’re right. We will fight aggressively – and prove our case – through this case, we will have a clear playing field for the industry here in the United States, Garlinghouse said at the time. The lawsuit revealed idiosyncrasies on the part of the SEC, including ignorance of XRP investors, lack of early action, and a possible conflict of interest by former SEC officials. Meanwhile, tech writer Roslyn Layton notes that Ripple’s test is needed to hit back at the SEC’s bad behavior and overreaching in this case: Some investors want to punish the SEC for its bad behavior and reduce the temptation to abuse its powers in the future. Either way, the SEC needs its own Ripple test to restore its credibility. It’s not clear how the trial will go, but Garlinghouse has the right to have his way in court.
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Last week, the Securities and Exchange Commission (SEC) settled the long-running securities fraud lawsuit brought against Ripple Labs by the Autorité des marchés financiers (AMF) of the Québec. The AMF accused Ripple Labs of “misleading” investors in its 2014 offering of XRP, the company’s virtual currency. In exchange for a $227,500 fine, Ripple Labs-which was co-founded by a former Goldman Sachs executive-agreed to change its XRP sales terms and to monitor sales more carefully in the future.. Read more about when will ripple lawsuit end and let us know what you think.
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