The case between the United States of America Securities and Exchange Commission (SEC) and Ripple, a cryptocurrency company, has received an update. The court has now granted Ripple permission to Seal in additional documents in their defense. Ripple had earlier filed a motion to be allowed to Seal in extra documents as they seek justice.
The motion was filed on October 22, 2021, and was granted on Friday, October 29. The documents will now be presented “in camera review” as the case proceeds. The SEC and RIpple have been locked in a case for nearly 12 months now and new revelations with the potential to impact the case have been made. This development was announced on Twitter by James K. Filan on Friday. Filan reported that
Ripple had submitted a Seal appeal after it conferred with the SEC for approval. The SEC further lists the exhibits as confidential and it is only accessible by the court and not the public. The dynamics of the case are expected to be impacted by this development. Ripple has stated that the exhibits are meant to help the trial and not to sway public opinion.
SEC Vs. Ripple
On December 21, 2020, the SEC filed a lawsuit against Ripple Labs, its CEO, and co-founder, accusing them of offering unlicensed securities to the public. The SEC is one of the most powerful regulatory bodies in the US and is responsible for granting licenses to companies that want to list securities for the public to trade. The SEC accused Ripple Labs of offering and selling unregistered securities in a bid to raise funds to the founder and co-founder, Brad Garlinghouse, and co-founder Chris Larsen respectively. The lawsuit has dragged on since then, with the court yet to reach a final decision over it.
Just a week later, Ripple Labs token, XRP, was delisted on Coinbase, the largest cryptocurrency exchange in the US. Ripple Labs top executives, who earlier announced their intention to “defend themselves”, sent a letter to a US District Court in March 2021 seeking a dismissal of the case over what they termed an absence of fair notice and due process. The SEC would then send a letter to the same court asking for a fair hearing trial to begin immediately.
The SEC proposed a framework that grants blockchain and cryptocurrency companies that offer commodities and securities a three-year window to conform to existing procedures.
What the Case Will Mean for The Crypto Industry
It is likely that the outcome of the SEC vs. Ripple case will set the tone for crypto securities in the US. The crypto industry is already under much scrutiny which is set to increase as more companies file for different approvals. Recently, the SEC surprised many by approving the listing of several Bitcoin-ETFs on the stock exchange. This sent a signal of the regulatory body’s willingness to cooperate with the crypto industries.
Upon conclusion of the case, it is most likely that crypto-based companies will have further legal directives to follow when launching projects.