Deadlines for filing remedy briefings are approaching in the ongoing legal battle between Ripple Labs Inc. and the U.S. Securities and Exchange Commission (SEC). This is an important development in the legal dispute that has been ongoing since December 2020 and has also attracted great attention beyond the crypto world. According to an announcement by attorney James K. Filan on The SEC has until May 6th to respond to this. This brings the legal dispute, which is characterized by controversial statements and procedural maneuvers, to another climax.
The end result of the legal battle between the SEC and Ripple is likely to impact the entire crypto industry as it could set precedents regarding regulatory oversight and compliance. The SEC originally wanted to have the XRP token fully classified as a security and thus subject to strict regulatory requirements. Ripple argued, however, that XRP is not a security and that the SEC also failed to inform Ripple Labs of appropriate reasons for its classification as part of the investigation.
What court ruling can Ripple expect?
The San Francisco company received legal support from the responsible court in New York. In July 2023, Judge Analisa Torres ruled in favor of Ripple Labs, finding that XRP was not a security in the context of trading on crypto exchanges by retail investors. However, at the same time, it decided that XRP must be considered a security when sold to institutional investors. Since then, the SEC has focused on the latter aspect and demanded the release of financial documents and details of XRP sales contracts. That’s why even pro-XRP lawyer John Deaton assumes that an agreement will be reached between both parties temporarily off the table is.
In addition, he suspects that a fine against Ripple could be between $10 and $100 million. That sounds like an immense sum, but it is put into perspective when compared to the $1.3 billion that the SEC demanded at the start of the trial. In addition, Ripple is said to have spent around $200 million for defense so far issued have.
Even in the event of a benign outcome for Ripple, it is not certain that the price of the XRP token will have a lasting positive impact. Regardless of the ongoing litigation, tokenomy is highly centralized and the Ripple Laps company’s success could happen even without XRP adoption. You can find out what future the XRP token really has in this BTC-ECHO article.
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