How often have we heard from executives from Ripple say, “Ripple is not a security?” The answer to the question can have a massive effect on the market. However, until now, there hasn’t been an official ruling or claims on it.
As reported earlier on CoinGape, investors in XRP had filled a case against Ripple for misleading and selling unregistered security. The lawsuit was filed in July 2018, until now Ripple has successfully averted a trial.
At the beginning of this year in February, Ripple achieved a minor victory to gain a tactical advantage in the case. Nevertheless, the plaintiff’s lawyers Taylor-Copeland filled another case in California in August. Due to the difference in state laws in the US, California provides the investors with an advantage.
Winning On a Technicality
On Friday, Ripple moved to dismiss the lawsuit on legal grounds. It was a lengthy and detailed filling that built the case for Ripple in court. However, Ripple has avoided dismissing the motion based on the claims. Jake Chervinsky, a lawyer who is closely watching and analyzing the case noted,
When you hear the phrase “winning on a technicality,” it usually means the defendant prevailed on an argument to the effect of: “it doesn’t matter if I did the bad thing you claim I did; the law says you can’t do anything about it.
Ripple has claimed that the investors were not in a position to file the claims due to the expired timeliness. Moreover, it has also denied several other allegations of XRP sale by Ripple. However, it has avoided clarifying in writing why ‘XRP is not a security.’
Furthermore, the points raised by Ripple successfully avoids the courts from ruling on them as well.
Nevertheless, Ripple’s lawsuit assumes that Ripple is a currency. However, there are certain limitations in the law that avoids examining those claims for now.
Dead-end for Security Question?
The case can be extended up to the year 2021. Jake Chervinsky noted that
Assuming the current briefing schedule holds, the plaintiff will file an opposition by October 4. Ripple will file a reply by November 4. The court will hear oral argument on January 15, 2020.
However, many different angles to it can delay it even further. Moreover, there is a likelihood to settlement if the courts begin to accept it a “class action.”
Therefore, an official statement on the matter still rests in oblivion. Ripple’s executives firmly believe that XRP is a decentralized currency.
However, its’ influence over XRP, the changes in the structure of Ripple and partnerships have brought XRP to where it is today. There have been accusations against XRP dumping by Ripple as well.
Jervinsky concluded his brief explanation of the situation by saying,
In short, Ripple’s motion to dismiss is a well-crafted & tactically effective response to the complaint, but a big disappointment for those hoping this case might yield helpful precedent on how the securities laws apply to digital assets.
As this seems a dead-end, the Financial House Committee will meet with the SEC chairman on Tuesday, 24th September. A lot of clarity on how the US plans to shape crypto laws can be expected from the meeting.
Do you think that 24 August’s meeting will have a decisive effect on the market as well? Please share your views with us.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com