The Securities and Exchange Commission (SEC) has been given a two-month extension to conduct discovery in their lawsuit against Ripple.
XRP holders protested the SEC’s lawsuit against Ripple, a distributed ledger technology startup, and demanded that the regulator end its “war on crypto” and investigate former chairman Jay Clayton’s potential conflict of interest outside the SEC’s headquarters in Washington, D.C.
While defending their opinion that the enforcement action was brought before the inquiry was completed, Ripple’s attorney pointed out that the SEC “misstates the basis for Ripple’s opposition to extending discovery.”
SEC’s lawsuit
According to the Securities and Exchange Commission, Ripple Labs and its executives illegally sold $1.3 billion in XRP to clients in December 2020, resulting in the filing of an SEC lawsuit concerning the sale of unregistered securities in the form of the XRP token.
Ripple argues that because of its decentralized character, neither Bitcoin nor Ethereum are considered securities by the SEC and it also claims that because they operate in the same space as their peers, they are being unfairly treated.
Ripple has been attempting to find out why the SEC has not gone after BTC and ETH. Ripple asserts it has never held an ICO, has never offered securities and has never sold XRP.
However, the SEC believes Ripple used a centralized approach to generate and distribute XRP. Ripple Labs, as well as co-founders Brad Garlinghouse and Chris Larsen, have been accused by the SEC with conducting an unregistered securities offering worth $1.3 billion for selling XRP over the previous eight years.
Holders of XPR have been holding on in the hopes that the SEC’s action against Ripple will be resolved soon. However, according to attorney James K Filan’s Tweet, the wait might be a little longer. He said that the SEC’s request to extend the investigation’s discovery period by 60 days had been approved.
#xrpcommmunity #SEC_NEWS v. #Ripple #XRP BREAKING. THE SEC’s REQUEST TO EXTEND DISCOVERY DEADLINE IS GRANTED. pic.twitter.com/DipS32P473
— James K. Filan (@FilanLaw) June 14, 2021
Despite the extension, Filan declared this a win for Ripple in a post following the announcement. This is a positive development for the fair notice defense. Judge Netburn has made it clear to the SEC that the defense would focus on the SEC’s activities instead of Ripple.
Attorney Jeremy Hogan predicts that the two-month extension will take the case into 2022 and he goes on to say that a settlement is still possible, but that it is unlikely at this point. Ripple’s defense argues that there is insufficient justification for changing the discovery schedule, claiming that a delay would pose a “existential threat” to Ripple’s US business.
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