US SEC gets a minor win in the legal dispute with Ripple Labs
- The US SEC has been granted an extension to submit a discovery schedule relating to two individual defendants.
- The case started in Dec. 2020, after the SEC alleged Ripple made $1.3B from an unregistered security offering.
- Ripple Labs argues that its native token, XRP, is not a security.
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The case against Ripple Labs has taken another twist days after Ripple scored a minor victory and this time it is the US Securities and Exchange Commission (SEC) that has scored a small victory. The SEC has been allowed an extension to provide a discovery schedule relating to two individual defendants namely Chris Larsen (Ripple Lab co-founder) and Brad Garlinghouse (Ripple Lab CEO).
The bitter legal battle between the SEC and Ripple Labs started in Late December 2020 when the SEC accused Ripple Labs of making $1.3 billion from an unregistered Security Token Offering (STO) using its native token, XRP.
But Ripple Labs has stood its ground stating that the XRP token is not a security but rather a method for facilitating international payments. Ripple has also argued that the SEC failed to give Ripple fair notice about its token being a security.
The legal battle has dragged for years
While the ruling is a win for the SEC, some onlookers believe the SEC is dragging its feet and slowing down the case to frustrate Ripple Labs.
Ripple Labs has boar the burden of the case for about two years now and it is the XRP token that has taken the greatest hit to an extent of being delisted from a majority of crypto exchanges since they fear being indicated of offering a ‘security’ instead of a cryptocurrency.
What the granted extension mean
According to the court ruling:
“The SEC shall inform the Court of its position on whether any additional discovery is required within a week of the filing of the Individual Defendants.”
The extension gives the defendants until April 8 to submit an answer to the SEC’s complaints and the SEC’s decision on the additional discovery is scheduled for April 15 with a joint proposed scheduling order set for April 22. However, these dates are not cast on stone; they can be altered depending on how fast Ripple Labs moves.
According to the order:
“The filing of the Individual Defendants’ Answer is the triggering event. When the Answer is filed, even if before April 8th, the date the Answer is filed starts the two-week clock running for the filing of the SEC position on discovery and the Joint Proposed Scheduling Order.”
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