The legal battle between Ripple Labs and the SEC intensifies as a scheduling order issued by Magistrate Judge Sarah Netburn pushes the fight over expert witness submissions to a head.
This order grants the SEC an extension until April 29, 2024, to respond to Ripple’s motion to dismiss the SEC’s recent expert filings. Ripple contests these submissions, which aim to bolster the SEC’s case for penalties and a final judgment. Following the SEC’s rebuttal, Ripple will have a limited window of three business days to deliver its counter-response.
A History of Fair Rulings?
This development comes amidst Judge Netburn’s recent nomination as District Judge within the Southern District of New York. Notably, she will continue to preside over the Ripple vs. SEC case, a move seen favorably by the cryptocurrency community due to her track record of issuing rulings perceived as fair.
XRP Counters SEC’s Claims for Penalties and Disgorgement
At the heart of the dispute lies XRP’s vehement opposition to the SEC’s proposed hefty civil penalties. Ripple argues for a significantly reduced penalty, suggesting a figure closer to $10 million. They further challenge the SEC’s claims, asserting a lack of substantial evidence to support them.
ODL Sales: Utility vs. Investment? Ripple contends that the SEC mischaracterizes Ripple On-Demand Liquidity (ODL) sales as investment contracts. Bill Morgan, representing Ripple, has consistently emphasized this point throughout the three-year legal battle. According to Morgan, ODL transactions differ fundamentally from traditional investments. He argues that customers hold XRP for mere seconds to facilitate cross-border payments, not for investment purposes.
Also Read: XRP vs. USDT: Ripple Shifts Gears in ODL Amidst SEC Lawsuit (Will Overseas Operations Be Affected?
The crux of Ripple’s defense hinges on this distinction. They maintain that the SEC cannot demonstrate a likelihood of future violations or reckless behavior in its XRP sales. Additionally, Ripple cites the Govil case to counter the SEC’s demand for disgorgement, emphasizing the absence of evidence for any financial harm caused.
With the deadline looming, both parties are expected to submit their strongest arguments in the coming days. This development is likely to have a significant impact on the trajectory of the highly watched Ripple vs. SEC case.
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