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- The SEC uses Ripple’s lawsuit ruling as supplemental authority in the Binance case.
- Judge Hamilton’s objective ruling on XRP’s third Howey test prong sparks debate.
In its continuous legal dispute with Binance, the U.S. Securities and Exchange Commission (SEC) has now added a new twist by taking advantage of a recent decision from the Ripple class action lawsuit. Following a legal opinion from a California district court judge, which differs greatly from a Southern District of New York (SDNY) judge’s ruling that XRP is not a security, the SEC is acting.
SEC Files Ripple Lawsuit as Supplemental Authority in Binance Suit
As supplementary authority, the SEC has filed the Ripple class action case in the District Court of Columbia most recently. The continuing case against Binance, Binance.US, and former CEO Changpeng Zhao is relevant to the arguments and judge’s ruling in the Ripple complaint, claims the SEC.
This development occurs as most discovery conflicts in the Binance litigation are already settled as the discovery and deposition period draws to a close. A joint motion to dismiss is one of the motions on which the lawsuit is presently awaiting a court decision.
Presided over by Judge Hamilton, Ripple Labs, Inc. won its case when the majority of the plaintiff’s claims of securities violations were rejected. The trial will nevertheless go forward despite Ripple CEO Brad Garlinghouse’s deceptive claims about XRP sales.
In reaction, Garlinghouse has stuck to his guns, saying he is confident and ready to provide more details during the trial. He also brought out that the lone complainant might not have heard the disputed remark before trading and did not buy XRP directly from Ripple.
Ongoing Debate and SEC’s Strategy
The XRP community is in deep discussion after Judge Hamilton decided to overturn the SDNY court’s conclusion that XRP programmatic sales are not securities. The court pointed out in his dispassionate decision on the third element of the Howey test that programmatic buyers might have anticipated gains from Ripple’s efforts.
The SEC has, in the meantime, also brought Garlinghouse’s purportedly deceptive remarks about XRP to notice. Ripple’s principal concern resides in the SEC potentially leveraging this California case in its Second Circuit appeal against Judge Torres’ summary ruling on XRP, which hinges on whether XRP sales constitute securities.
Meanwhile, CoinMarketCap data show that the price of XRP is about $0.4853 at the moment of writing, down 0.87% over the last 24 hours. All the same, XRP has increased by 1.22% throughout the last seven days, indicating a bullish trend.
This price swing occurs in the backdrop of more general market uncertainty and Ripple-related legal ambiguities. Previous to this, CNF brought up important issues raised by Stuart Alderoty of Ripple about the SEC’s recent decisions, notably the unresolved status of Ether as a security.
