TL;DR
- Ripple’s legal battle with the SEC reaches a key moment as the agency must file its opening brief by January 15.
- With Gary Gensler stepping down on January 20, incoming pro-crypto SEC Chair Paul Atkins raises hopes for a favorable resolution, though the case’s complexity tempers expectations.
The Deadline Approaches
The legal tussle between Ripple and the US Securities and Exchange Commission (SEC) started in December 2020. Back then, the regulator sued the company, accusing it and some of its executives of illegally raising more than $1.3 billion in an unregistered securities offering by selling XRP.
Despite the numerous rulings and developments in the following years, the lawsuit remains ongoing. Last year, for instance, Judge Analisa Torres ordered Ripple to pay a $125 million civil penalty for violating federal securities laws through its institutional sales of XRP. Prior to that, she found that the company’s programmatic sales of XRP to retail clients through centralized exchanges did not breach the rules.
The firm was ready to pay the fine, which would have officially settled the case. After all, the sum represented just a fraction of the $2 billion the SEC initially asked for. Nonetheless, the watchdog filed a last-minute appeal, and the lawsuit entered a new phase, which consists of filings and a briefing process.
It is worth mentioning that the agency’s petition will be dismissed unless it files an opening brief against Ripple by tomorrow (January 15).
According to some legal experts, the SEC will not miss the deadline. Jeremy Hogan claimed people shouldn’t be surprised if that’s the case since the agency is still spearheaded by Chairman Gary Gensler. The latter is known as a critic of the digital asset industry, with the Commission filing countless lawsuits against crypto businesses during his tenure.
“The SEC will file its brief on January 15 because it has to, but that doesn’t mean the incoming heads of the SEC won’t settle the case. It changes nothing,” he added.
Waiting for the Next Chairman
It is worth mentioning that Gensler has less than a week left at the helm of the securities regulator. He decided to step down on January 20 after Donald Trump promised to fire him on day 1 after assuming office at the White House.
The next leader of the SEC will be Trump’s nominee, Paul Atkins. He has expressed a pro-crypto stance in the past, triggering enthusiasm across the XRP Army.
Some of the optimists expect the Commission’s upcoming leadership to take a less hostile stance toward the cryptocurrency industry and push the case against Ripple to a favorable resolution soon. However, they should have somewhat realistic hopes, considering the complexity of the entire legal process.
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