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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.

XRP Lawyer- SEC Is “Wrong” For Labelling Eth A Security

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XRP representative John E Deaton feels that ETH is an alphanumeric code and as such the SEC labeling ETH as security is wrong.

“I’m not saying the gov’t shouldn’t go after bad actors. Going after individuals who broke the law is different”, he stated.

Deaton who is a former Marine-turned-class-action lawyer shared his thoughts on what SEC’s head Gary Gensler might do once Ethereum’s transitioned to PoS in September. He also addressed rumors of his supposed favoritism towards the SEC for going after ETH or its founders.

Recently, I was very critical of VitalikButerin over his childish and hateful comment about XRPHolders losing their rights for protection because Ripple executives described ETH and BTC as Chinese-controlled technologies 2 yrs ago when Ripple was being sued by the SEC.

He continued by saying even if he felt Vitalik’s comments to be “demoralizing and stupid”, that doesn’t mean that he would back the authorities attacking today’s ETH the way it has other tokens.

“Tokens like XRP, ETH, ALGO, ADA, XLM, etc., traded for 5-10 years should be treated as commodities, not securities”, he added.

XRP lawsuit- Ripple Would Spent $100M

The founder of the CryptoLaw, recently said that more than $15 billion were lost because the SEC “intentionally chose not to limit the allegations against Ripple to specific sales made by Ripple and its executives but instead alleged all XRP, including secondary market sales of the token, are unregistered securities.”

This was in response to a tweet from Messari CEO Ryan Selkis, who claimed that investors lost roughly $1 billion to crypto frauds last year and another $7 billion due to the SEC’s refusal for a spot ETF.

Selkis also cited statements by Ripple CEO Brad Garlinghouse, who previously claimed that the firm would spend $100 million for its legal battle with the SEC.

Earlier, Stuart Alderoty, Ripple’s general counsel, criticized the SEC’s approach to consumer protection in a recent op-ed. Alderoty said that rather than protecting consumers, the SEC intends to leave them “holding the bag.”

He then went on to add that instead of working with other regulatory agencies, SEC Chair Gary Gensler has taken an assertive regulatory stance.

SEC vs Ripple (XRP): SEC Requests Court To Sustain Its Recent Objections Related to Hinman Emails

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On the ongoing Ripple (XRP) vs SEC case, there is a new update. The U.S. Securities and Exchange Commission has responded to a recent court order requiring it to provide the draft emails of the Ethereum speech that former senior official William Hinman delivered back in 2018 and explained its concerns in the reply brief.

The SEC is still certain that the speech drafts are irrelevant to the case’s accusations. The complainant claims that the defendants used a “fundamentally contradictory rationale” to pressure the agency into turning over the requested information.

The SEC contends that this is completely inaccurate, notwithstanding Ripple‘s legal team’s assertion that many people misinterpreted the Hinman speech to imply that the XRP wasn’t unregistered security. The agency even included a link to a Fortune story that said the Ripple-affiliated cryptocurrency would have a difficult time passing the regulator’s decentralization test.

The SEC claims that the deliberative process protection and the attorney-client privilege both protect the speech. Magistrate Judge Sarah Netburn has thus far rejected every request by the government to keep the information a secret.

Ripple said that the SEC’s worries were inaccurate representations of the judge’s rulings. According to the plaintiffs, ordering the government to release the draft emails might improve regulatory clarity. The SEC has asked the court to sustain its objections and reject Ripple’s assertions.

Ripple (XRP) receives recognition as one of the fastest-growing companies

Ripple, a blockchain corporation with headquarters in San Francisco, has been named one of Inc. Magazine’s fastest-growing American businesses. The firm associated with the XRP cryptocurrency is ranked 2,456th this year after expanding by 236% in just one year.

Ripple was ranked 123rd in 2020. Notably, troubled bitcoin lender BlockFi came in first place after posting growth of 245,616% in the previous year. Before the start of the crypto winter, it was the American corporation with the fastest growth.

Crypto juggernaut FTX recently concluded an agreement with BlockFi that allows it to purchase the business situated in Jersey City, New Jersey, for up to $240 million. In order to put this into context, BlockFi planned to be valued at $5 by 2021.

Will Ripple Emerge As A Saviour For Insolvent Celsius?

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Prominent blockchain payments firm Ripple Labs Inc, has turned heads after it expressed interest in buying assets of debt-ridden crypto lender Celsius. In an interview with Reuters, a Ripple representative stated,

“We are interested in learning about Celsius and its assets, and whether any could be relevant to our business,” while declining to comment regarding a possible acquisition.

In June this year, Celsius paused withdrawals citing “extreme” market conditions and filed for bankruptcy in New York last month, with a $1.19 billion deficit on its balance sheet.

Ripple on the other hand, has continued to sail through the crypto market turmoil and “is actively looking for M&A opportunities to strategically scale the company,” the spokesperson said.

For the record, the blockchain firm is not among Celsius’ major creditors, the latter’s bankruptcy filings showed. As for the latest development, both Ripple and Celsius did not provide any comment at the time of writing this article.

The San Francisco firm is currently in the limelight for its high-profile lawsuit with the US regulatory giant SEC.

Ripple’s Crucial Victory Against The Sec

The firm was sued by the Securities and Exchange Commission in 2020 over the token XRP. The agency accused Ripple and its current and former chief executives Brad Garlinghouse and Chris Larsen of illegally selling $1.3 billion XRPs in unregistered securities offerings, which Ripple’s founders created in 2012.

Ripple and the executives have denied the allegations and argued that XRP should be treated as a digital currency rather than an investment contract like a stock. The case has since then dragged on.

As of now, the blockchain firm and individual defendants, have submitted their response against the SEC’s objections to the court’s recent rulings regarding the disclosure of emails related to the Ethereum speech of former top exec William Hinman.  

The defendants have requested the judge to deny the SEC’s objections. So far, Magistrate Judge Sarah Netburn has issued three orders that required the agency to produce the documents in question.

The court also squashed the SEC’s claims of attorney-client privilege [ACP] in July saying that providing legal advice wasn’t the predominant purpose of the communications.


Robinhood Lists Stellar [XLM] And Avalanche [AVAX] Amidst SEC Probe

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Leading commission-free trading app Robinhood has expanded its crypto offering by adding Stellar [XLM] and Avalanche [AVAX], per a recent announcement. The trading platform’s recent addition is a welcome change to its earlier conservative listing policy toward crypto assets.

A few months back, it added support of Solana [SOL], Shiba Inu [SHIB], and Polygon [MATIC]. followed by Chainlink [LINK] in late June.

Beginning its foray into the crypto space in February 2018, Robinhood initially allowed its users to trade Bitcoin and a small selection of altcoins. Notably, BTC still accounted for over a third of the firm’s crypto-related revenue during the heights of the meme coin frenzy in the first quarter of 2021.

It gained a lot of attention when the world’s acclaimed meme coin Doge went live in July 2018. Following that it refrained from adding any more crypto tokens for almost three years at a time of massive growth in the crypto industry.

Earlier this year, the California-based firm started releasing crypto wallets, enabling users to withdraw crypto from exchanges.

But that could not alleviate the firm’s woes as in late June, shares of Robinhood took a hit due to shrinking revenue and a decline in active users. There were also reports of a possible acquisition by FTX which was denied by the firm.

Robinhood Embroiled In Legal Battles

On top of that, it recently reduced its staff by 23% amidst revenue falling to nearly halved in the second quarter of 2022.

In addition to that, the U.S. Securities and Exchange Commission has been investigating the company’s compliance with short-selling rules since October 2021, as per a recent filing.

It also received requests from the SEC in Q2 seeking information related to the firm‘s compliance with trade reporting requirements concerning securities and fractional share lending.

This week, the trading platform’s crypto wing was fined $30 million by the New York State Department of Financial Services, in violation of anti-money-laundering and cybersecurity rules.

In 2020, the agency awarded a penalty of $65 million for misleading its customers about a key source of revenue, called payment for order flow which the firm didn’t admit or deny wrongdoing.

Ripple: SEC Writes Letter To Reopen Discovery in the Ongoing Lawsuit

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The legal team for Ripple recently claimed that the US Securities and Exchange Commission wants to restart discovery in the case in a letter to Magistrate Judge Sarah Netburn.

The defendants have asked the court’s approval to serve non-party subpoenas in order to get copies of a number of videotapes in which the agency’s representatives are heard making public statements.

Users are not allowed to obtain unauthorized copies of the videos from the video hosting services.

As a result, in order for Ripple’s legal team to be able to retrieve the necessary material, subpoenas must now be issued.

The materials will be authenticated by the SEC when the defendants’ motion to serve subpoenas on the relevant firms is granted by the court.

SECs request in the Ripple case might not get the green flag

The SEC, however, is probably not going to get the green signal for the request. To serve its own set of subpoenas and get copies of some recordings in defense of its own claims, the plaintiff requests that the court resume discovery.

Since the SEC did not serve any petitions for admission during the discovery process, the defendants contend that the demands made by the agency are “improper.”

The defendants are not requesting to reopen discovery, according to Ripple, so there is no “timeliness concern” with its own request.

The SEC has been accused by the defendants of stalling the case on many occasions. The business has so far spent more than $100 million on legal bills in its legal spat with the regulator, as per Ripple CEO Brad Garlinghouse.

Now that the lawsuit between Ripple and the SEC, or vice versa, has reached an unpleasant level, it may not end well for this lengthy trial.

Given that the company’s scope of operation includes the entire globe and that the procedure, no matter how it turns out, won’t significantly restrict Ripple’s potential, perhaps this is the best course of action.

XRP Holders Win The Right To Retain Amici Status

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XRP Holders got a major respite after Judge Torres denied SEC’s motion to repeal amici status and bar attorney John E Deaton from further proceedings. As per the letter, “Amici can’t participate in the expert challenge now but may file an application to brief concerns with SEC’s expert at the summary judgment”.

The latest development was shared by James K. Filan, the defense lawyer, and former federal prosecutor.

Last week, SEC filed a motion to prevent Deaton from further participating in the case. The regulator, in the heavily redacted letter, accused the lawyer of harassing SEC employees through online threats and inserting himself in the litigation.

In addition to that, the Securities and Exchange Commission also sought to revoke the amici curiae status granted to holders of the XRP tokens.  

It needs to be reminded that in March 2021, a group of XRP holders led by Deaton filed a motion to involve in the case. Although their attempt was rejected by the court last October, they did manage to obtain amici status.

Again this year, Deaton wrote a letter sent to the Members of the House Financial Services Committee alleging that the SEC’s actions were causing huge distress for the holders of the token.

The lawyer then went on to claim that the amici curiae status was for the benefit of XRP holders.

XRP Community Rejoices

Now with the latest ruling, Deaton would not only be able to stay on the case and retain amici status. But will also be allowed to raise concerns about the regulator’s expert when filing his summary judgment [SJ] brief.

Reacting to the news, an XRP member tweeted,

This is a win for sure. Although J. Torres denied Amici’s request for Daubert participation, the same purpose will be achieved by SJ participation. And although she implicitly denied access to Doody’s report, SEC already lost that issue re: Daubert motion redactions.

While some commented that Torres’ Denial of Movants’ request was somewhat of a loss for XRP holders. It’s still a win as Torres didn’t quash amici’s status.

Another user replied that it should not be considered a loss. “The judge is asking the lawyer to weigh in at summary judgment instead of now.”