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Ripple Attorney Breaks Down SEC’s Intepretation Of XRP

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Ripple advocate James K. Filan has briefly summarized the SEC’s argument in his opinion. According to him, although the regulator does not explicitly state that XRP is a security, its major line of defense is that any purchase of the token is, in actuality, an investment with other XRP holders and with Ripple.

While XRP may not be a security per se, the only way it can be offered or sold is as a security, he continued. “And when you grasp what the SEC is saying, regardless of how it is presented, the SEC wants a judgment that encompasses secondary sales.”

SEC considers every unit of XRP, to be an investment contract with Ripple and unregistered securities, even if it is purchased and sold on the secondary market by people who are not affiliated with or familiar with the firm.

Ripple, on the other hand, argued that XRP is not a security because it has no “post-sale” obligations to purchasers and slammed the plaintiff’s stance as “overreaching and illegal”.

Last week, the San-Francisco-based payment firm filed its application seeking a summary judgment as there is no “investment contract” giving investors rights or obliging the issuer to perform in their best interests.

In a similar manner, the SEC is requesting a decision in its favor without a trial, arguing that purchasing the token involves an “investment in a shared company with other XRP holders and with Ripple” and that purchasers anticipate making a profit.

That said, the XRP litigation has drawn focus from the crypto community. David Gokhshtein, the founder of Gokhshtein Media, recently commented that a victory for Ripple would significantly affect the entire crypto market.

Ripple’s Win Will Trigger XRP Price Explosion

A dramatic XRP price explosion could result from the court judgment in Ripple’s favor in the legal battle with the agency.

The SEC filed the action in December 2020 after alleging that Ripple and two of its senior executives, Chris Larsen and Brad Garlinghouse, sold XRP tokens worth more than $1.3 billion while misleading investors into believing they would receive substantial returns on the company’s earnings.

Gokhshtein praised the XRP Army in a different tweet. He said that it takes “patience and diamond hands” to endure such a hard legal process.

XRP Lawsuit: Ripple Gets A Legal Boost Ahead of Crucial Court Verdict

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In a new update to the XRP lawsuit, Ripple’s legal team got a major boost with the addition of Attorney Bethan Rhian, as shared by the former federal prosecutor, James K. Filan.

“Attorney Bethan Rhian Jones has filed an application to appear and join the Ripple Labs’ defense team. Attorney Jones is with Kellogg Hansen,” the tweet read.

According to attorney Jones’ bio, 2018 saw the lawyer working as an associate for Kellogg Hansen. Ms. Jones advises clients in complicated business disputes and specializes in instances involving antitrust, telecommunications, and the False Claims Act.

The latest addition comes at a time when Ripple awaits important decisions, including those relating to the DPP and the legal dispute over the records of former SEC official William Hinman.

James K. Filan recently predicted that the SEC may attempt to submit a motion for certification of an interlocutory appeal to the Second Circuit if it loses privilege issues before Judge Torres.

Previously, Ripple hired two Kellogg Hansen attorneys in July who were Kylie Chiseul Kim and Clayton J. Masterman to add teeth to its legal team.

XRP Rose By 68% In A Week

Ripple CEO Brad Garlinghouse appeared on Fox Business this week and spoke about XRP’s price and its implications with the Ripple lawsuit. 

“Before the SEC got involved with us and ETH, XRP was the second-most valuable digital asset ahead of ETH,” he stated. Garlinghouse also said for Ripple, a trial is unnecessary since the facts of the case “aren’t really in dispute”.

“We think [the judge] has the information she needs to make a ruling, and we think it’s very clear the SEC is grossly overreaching their authority,” he said.

Following a robust week of gains and investor confidence in the SEC’s case against Ripple, XRP, a cryptocurrency originally founded by the creators of the crypto payments business Ripple, soared an impressive 68% on 23 Sept in just seven days.

Since then, the price of the sixth-ranked asset has retraced and is exchanging hands at 48 cents, at the time of writing this post. In the last 24 hours, XRP is down 0.42% with a market cap standing at $24 billion.

Ripple Labs & CFTC’s Surprise Meet Sends XRP Community Into A Frenzy

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A meeting between Ripple and the Commodity Futures Trading Commission [CFTC] was held in the former’s office as per a tweet shared by CFTC commissioner Caroline D. Pham.

Ripple’s CEO Brad Garlinghouse also took to Twitter welcoming the top exec calling it “an absolute pleasure” and that the meeting was a typical “public-private engagement”.

Pham, an American lawyer who took over her new role in April 2022, described the visit to the blockchain firm as a “learning tour”.

Shortly after being sworn in as the CFTC commissioner, the top exec criticized SEC’s move for bringing insider trading charges against a former Coinbase product manager and two other individuals, calling it “a stunning example of regulation by enforcement”.

“Major questions are best addressed through a transparent process that engages the public to develop appropriate policy with expert input,” she wrote in a statement. “Regulatory clarity comes from being out in the open, not in the dark.”

While many in the crypto community hailed Pham’s bold stance, it exposed a growing feud between the SEC and the CFTC, two organizations that are supposed to work closely for regulating digital assets.

In fact, it has taken the shape of a political conflict between the top U.S. financial regulatory agencies after Chairman of the CFTC, Rostin Behnam testified at a recent Congressional hearing that it was the “right regulator” to oversee digital assets trading.

In a number of cases, the CFTC head has suggested an approach that is friendlier to the developing asset class than the SEC’s enforcement strategy.

Ripple Lawsuit’s Result Will Decide XRP’s Classification And CFTC’s Role

Following the latest announcement, the XRP community appeared ecstatic. Some took aim at the Securities and Exchange Commission [SEC], asking the regulator to take a leaf out of its counterparts. Many in the community felt that the timing was not just a mere coincidence.

In a lawsuit alleging that the company’s XRP sales broke securities regulations, the SEC and Ripple both filed petitions for summary judgment on 17th Sept. The investigation into the case began in December 2020.

Crypto proponents believe that the outcome of the lawsuit may determine which federal regulator would handle the XRP token more like a commodity or securities.

Ripple Put SEC In A Tight Spot After Filing Motion To Rule In Its Favour

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Ripple labs, CEO Brad Garlinghouse and Executive Chairman Chris Larsen have filed Motion for Summary Judgment seeking judgment as a matter of law, defense attorney James K Filan shared the latest update.

Filan also stated that these motions were not expected until 19th Sept. and so they were filed early.

Summary judgment is filed when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.

The 93-page document mainly includes rebuttals about Ripple and its relation to XRP. Citing instances of how Brad Garlinghouse and Christian Larsen utilized XRP to donate to charities as well as the early XRP Ledger developers to demonstrate that XRP is not used as an investment contract.

Ripple slammed SEC claims that every offer and sale of XRP is the offer and sale of an “investment contract” even if the seller has no connection with Ripple as “wrong and overreaching”.

Ripple’s GC Stuart Alderoty, a known critic of the financial regulator took aim by saying that the SEC is acting outside its legal purview. “The SEC is not looking to apply the law – they are looking to remake the law in the hopes that it can impermissibly expand their jurisdiction.”

Ripple Vs SEC legal War Heading For An Decisive End?

Another interesting observation made by the defendants in the motion was the market forces angle which they claimed proved fatal to the agency’s allegations.

This is because an SEC expert himself agreed that from 2018, the price of XRP correlates more closely with the prices of bitcoin and Ether–that is, the cryptocurrency market as a whole, rather than with any action or statement of Ripple.

Speaking on the latest development, Attorney Jeremy Hogan tweeted that these types of “concessions” are perfect for summary judgment. Hogan also pointed out the regulator failed to get on record that any XRP purchaser heeded Ripple‘s alleged marketing pitch.

“A big problem because it has the burden to prove EVERYTHING here”, the post read.

Crypto YouTuber Ben Armstrong believed that marketing tactics would end up being the focal point of this case and eventually be the trigger point for a settlement.

“Ripple has no reason to settle at this point, but this does make me believe we are heading to the final stages here,” he quipped.

Ripple’s General Counsel Tears Into SEC Chair’s Testimony

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Ripple’s general counsel Stuart Alderoty slammed U.S. Securities and Exchange Commission Chair Gary Gensler for his remark that the Supreme Court has already determined what is and isn’t considered a security.

“Was it intentional or does he really not know the law? Which is worse?” Alderoty tweeted.

“Gensler said it’s security if the investing public is anticipating profits based on the efforts of a common enterprise. The Courts already rejected that, b/c it collapses two separate Howey prongs into one and: “We do not interpret the Howey test to be so easily satisfied,” Ripple’s GA added.

On September 15, Republican Senator Pat Toomey quizzed Gary Gensler, chairman of the regulatory giant, regarding the structure the agency uses to oversee cryptocurrencies and on Gensler’s statements that almost all cryptocurrencies are similar to unregistered securities.

During the Senate Banking Committee oversight hearing, Toomey expressed concern that the agency isn’t doing its duties to its standard.

The US senator for Pennsylvania also asserted that the SEC lacks the necessary transparency. The issue, he claimed, is that the commission refuses to divulge the structure it employs.

Toomey also pointed out the differences between traditional securities and crypto, noting that these differences “merit a clearly stated and tailored regulatory framework.”

On the other hand, Gensler responded and maintained his stance that there is a well-established, multifactor standard that most tokens meet and that the Supreme Court has already addressed the meaning of security.

Toomey added that the SEC should offer “far more clarity” in the interim until Congress can step in and create a clear framework for crypto investors. The republican member also called out the financial watchdog for its inability to help investors adequately when the market had a dip earlier this year.

Ripple’s Stuart Alderoty Accused SEC Of Power Grabbing

In response, Gensler said that many companies need to come forward and directly talk with the SEC about listing and selling tokens. Gensler also thinks that there should be “one officer on the beat” in charge of overseeing cryptocurrency regulation.

The SEC chairman dismissed the notion that cryptocurrencies need specific regulation in a recent statement at an industry conference.

Alderoty of Ripple has repeatedly criticized the SEC’s stance saying that it was behind a “political power grab.”

Ripple is currently entangled in a grueling legal battle with the SEC, whose outcome is widely believed to have massive implications for the cryptocurrency industry.


Here’s How Ripple Responded To SEC’s Request To Seal

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On 12 Sept, Ripple labs submitted a letter of response opposing plaintiff’s U.S. Securities and Exchange Commission’s request to seal portions of court documents that contain information identifying the SEC’s proposed expert witnesses.

Ripple slammed that SEC has not produced the necessary particularised proof of fact, to justify that the sealing is essential.

The letter was addressed to magistrate Analisa Torres, one of the presiding judge of the lawsuit, and was co signed by the crypto firm along with CEO Brad Garlinghouse and executive chairman Christian A. Larsen.

The SEC and Ripple previously moved to exclude the former’s expert testimony, and on 9th sept, the US regulator filed a petition to seal some of the information from the reply briefs in support of those moves. The plaintiff argued that the move was intended to protect witnesses from potential abuse.

Then in late 2020, the SEC filed a complaint against the San-Francisco based fintech firm claiming that the blockchain firm sold over $1.38 billion worth of XRP, the native coin of the XRP Ledger developed by Ripple Labs, in an unregistered securities offering.

It further accused co-defendants Garlinghouse and Larsen for allegedly aiding and abetting Ripple’s crimes.

A tweet from defence attorney James K. Filan revealed that District Judge Analisa Torres approved the SEC and Ripple‘s joint letter on Monday that outlined schedules for redactions regarding sealing issues. This action is widely viewed as an effort by both parties to expedite the ending of the lawsuit.

Meanwhile, John Deaton, Amicus Curiae in the lawsuit spoke on the possibility of the two parties striking a settlement agreement.

Ripple Labs Headed For A Settlement With The SEC?

In a twitter thread, Deaton stated that the settlement in the case depends on the SEC as well as on the revelation of the Hinman speech drafts, emails, and other related documents.

There are also speculations that in the summary judgement XRP and ETH would be compared. However, the discovery of the Hinman speech document holds the crucial factor.

According to Deaton, Gary Gensler, the chairman of the SEC, would be unwilling to compromise owing to political concerns or in other words, unless it overcomes the political advantages.

Deaton stated that Gensler would receive validation if the SEC were to obtain a Summary Judgment. This will enable the commission to defend their authority to control crypto assets.

Ripple To Roll Out CBDC Projects In “Few Weeks”

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Ripple would soon dish out more central bank digital currency [CBDC] projects in the coming weeks, as revealed by the firm’s advisor Antony Welfare handles CBDC Europe and global partnership.

The announcement came in response to a tweet by a crypto proponent Sentosumosaba who shared an article dated 17 June where Welfare spoke on Ripple’s progress on several CBDC pilot programs including the Royal Monetary Authority [RMA] of Bhutan and the Republic of Palau.

Back in March 2021, the blockchain firm for the first time piloted a private version of the public, open-source XRP Ledger, thus highlighting the firm’s commitment to the digital currency sector.

Ripple in its blog claimed that Moving money on the CBDC Private Ledger will be cost-effective, reliable, and close to instantaneous.

It also began engaging with Central Banks around the world to better understand their goals and assess how the CBDC Private Ledger can help achieve them. 

A week ago, Ripple was identified as one of the initial participants of a “Technical Sandbox Program” launched by US-based think tank Digital Dollar Project, aimed at exploring the potential technical and business effects of a CBDC in the United States.

Ripple’s CBDC Innovate Hackathon With Over $197,000 In Prizes

In June, the blockchain entity also rolled out its first online CBDC hackathon called “Ripple CBDC Innovate”, which promised winners a total prize pool of $197,000.

The competition brought 483 participants to build CBDC-focused applications in any one of the three categories. First, improve interoperability of CBDCs and digital assets, second make it easier for retail use and interaction, and third- bring banking to neglected populations.

According to the CBDC Innovate website, the first stage finalists are set to be announced on Sept. 8, who will then progress to the second phase of the competition.

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Ripple To Roll Out CBDC Projects In "Few Weeks" 2

Three weeks back, the leading provider of enterprise blockchain and cryptocurrency solutions, announced the launch of RippleNet’s On-Demand Liquidity [ODL] in Brazil with Travelex Bank, the first bank in Latin America to utilize the technology.

Ripple recently hosted a two-day “The Apex XRPL Dev Summit” in Las Vegas which featured a number of new XRP payment solutions.

One of the main focuses of the summit will be on CBDC issues. In particular, the finalists of the CBDC Innovate Challenge will be announced.

Ripple Toss 100M XRP To Anonymous Wallet

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Fintech major Ripple has shifted a staggering 100 million XRP in a single transfer to an unknown wallet. The massive transaction was notified by the Whale Alert tracker.

Interestingly only a few days earlier, the blockchain firm took out several billion XRP tokens from escrow. In addition to that, whales too have moved nearly 300 million XRP in the span of two days.

According to the on-chain wallet tracking site, Bithomp, a large part of the funds goes to RL18-VN – an address routinely used by Ripple to shift funds beyond the company. In the past, from this wallet, crypto was sent to exchanges, institutional customers, and charity.

Since 2018, Ripple has been unlocking this big stash of XRP with the goal to support the token’s liquidity. For the most part, only around 100 to 200 million XRP tokens are added to the supply in circulation, and the rest gets locked back in escrow.

For those new, Escrow is a feature of the XRP Ledger that allows one to send conditional XRP payments. These conditional payments are called escrows, which keep aside XRP and deliver it later when certain conditions are fulfilled.

Meanwhile, Mi Yoshikawa, Ripple’s VP of Corporate Strategy and Operations, shared an update on an important new strategic partnership for her firm.

Ripple’s Top Exec Promotes XRPL For Web 3

Yoshikawa, who has been working at the firm for nearly six years, tweeted about a new collaboration between Ripple Labs [headquartered in San Francisco, California] and Web3 Design Lab, which was founded by design and marketing entity btrax.

In the tweet, Yoshikawa revealed that Ripple supports and promotes “the use of XRP Ledger in the introduction of Web3 by Japanese firms”.

She then further elaborated on the use cases of the XRPL:

The XRP Ledger already has various functions, such as token issuance, DEX, and smart contracts under development, so we hope that it will be used in various Web3 use cases in the future! In particular, the point of differentiation of XRP Ledger is that it is an enterprise-grade chain that has been running stably for 10 years.

Ripple’s New Partnership Will Bolster Web3 Development in Japan

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A new partnership with Ripple will aid in bolstering web3 development. “Web3 Design Lab,” a new service launched by btrax Inc., is intended to assist Japanese businesses in accelerating the development of their Web3 businesses for the international market.

Takahito Iguchi, a seasoned businessman and the CEO of Audio Metaverse, has been chosen as the service’s sole advisor.

To build Web3 Design Lab alongside the XRP Ledger (XRPL), btrax will collaborate with Ripple, the market leader in enterprise blockchain and cryptocurrency solutions, in conjunction with the launch.

“For nearly 10 years, Ripple has been a robust technical partner to enterprises in search of crypto and blockchain solutions to help accelerate their business, while the XRPL has served as the best-in-class blockchain for settlement of tokenized assets at scale,” said Emi Yoshikawa, VP of Strategy and Operations.

Ripple has been a helping hand in Japan

Japan’s market has long been a stronghold for ripple. To enhance cross-border payments to the Philippines, it teamed up with SBI Remit, the biggest money transfer company in the nation, last year.

Before choosing to remain in San Francisco, XRP thought of moving its headquarters base to Japan. Despite the legal clampdown in the US, the company keeps expanding globally.

As a design partner and provider of design services utilizing XRPs blockchain and cryptocurrency solutions, Web3 Design Lab supports the growth of Japanese businesses.

By encouraging a proper understanding of Web3, which is quickly gaining attention globally and is anticipated to grow further in the future, btrax hopes to help revitalize the global business of Japanese companies.

On August 18, Ripple and Travelex, a bank in Latin America, announced a new partnership to increase instant cross-border crypto payments in Brazil using its On-Demand Liquidity (ODL) service. Ripple has been a helping aid in cross-border payments.

Ripple CEO Caught Up In A Major CryptoLeaks Scandal

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Ripple CEO Brad Garlinghouse found itself in the latest pile of allegations levied by crypto whistleblower Crypto Leaks that he agreed to the proposal of becoming Kyle Roche’s angel investor in suing crypto competitors.

This, as per the documents, was meant to draw away regulators’ attention.

Denying the rumors Garlinghouse tweeted,

“Can’t comment on the validity of the slew of allegations in here, but I can unequivocally say that I have never met or spoken to (much less invested in) Kyle Roche.” 

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Crypto Twitter was rocked by allegations of a deep-rooted conspiracy from a Crypto Leaks report on Aug 26. As per the videos that the whistleblower uploaded on Friday, Emin Gün Sirer and Kevin Sekniqi, the respective CEO and COO of Ava Labs had inked a “secret deal” with American law firm Roche Freedman to “target and ruin crypto organizations.”

According to CryptoLeaks, Roche Freedman and Kyle Roche have a “special” agreement to provide legal services to Ava Labs in exchange for AVAX tokens and a major stake in the firm.

They also allegedly planned to use “litigation as a tool” to stamp out rivals and mislead regulators like the Security Exchange Commission [SEC] and Commodity Futures Trading Commission [CFTC].

In one video Roche said that he would “makes sure that the SEC and CFTC have other magnets [Avalanche competitors] to go after”.

Ava Labs CEO Emin Gün Sirer fired back terming the accusations as “conspiracy theory gibberish” and stated that they would never engage in these “self-serving videos and inflammatory articles”

Binance’s Changpeng Zhao a.k.a CZ too chimed by describing the allegations as “wild,” and wondered if the videos were deep fakes. The tweet has since been deleted.

Another Trouble Heading for Ripple?

Interestingly BinanceUS was sued by Roche Freedman recently for the Terra blowup. But Crypto Leaks alleged that this was done under the directive of Ava Labs. 

On the other hand, Ripple’s Garlinghouse remains embroiled in the long-drawn legal battle with the SEC. In the latest hearing, the blockchain firm received a minor relief after the regulator didn’t object to Ripple’s pursuit of protection for non-parties appearing in the Daubert challenge motions.

However, the latest development might signal trouble for the firm.