The US Securities and Exchange Commission (SEC) and Ripple will not be able to settle the current proceedings out of court due to changes in the SEC leadership.
Recall that in December the SEC filed a lawsuit against Ripple, accusing it of selling unregistered securities in the amount of $ 1.3 billion. Ripple CEO Brad Garlinghouse disagrees with the regulator’s accusations and called this lawsuit an “attack” on the entire cryptocurrency industry. Amid these events, many cryptocurrency exchanges have stopped trading XRP, among them Jump Trading, Galaxy Digital, B2C2, Simplex and Coinbase.
The parties sent a letter to the federal judge for the Southern District of New York, Analisa Torres. It says that the SEC and Ripple have previously discussed the possibility of resolving this issue, but today they do not see prospects for a pre-trial settlement of the claim. Previous negotiations took place during the administration of President Donald Trump and were conducted with heads of divisions who have already left their posts at the SEC.
After Joe Biden became president of the United States, there have been significant changes in the leadership of the SEC – now the position of chairman of the Commission is occupied by Gary Gensler. Ripple and co-founder Chris Larsen have previously received two disclosure notices. They indicated that, according to US federal law, XRP can be considered an investment contract, and therefore, a security.
However, Ripple declined to provide information, citing attorney-client privileges and lack of legal basis. Therefore, the SEC can oblige Ripple to provide documents and relevant witness testimony in court. A preliminary court hearing on the SEC and Ripple case is scheduled for February 22. The regulator expects to submit the first amendments to the claim by February 19, and the period for familiarizing the defendant with the plaintiff’s materials will be extended until August 16, 2021.
