Rumours are suggesting that Ripple’s drawn-out lawsuit with the US Securities and Exchange Commission has finally ended in a settlement.
Unsubstantiated whispers have emerged from within both camps that suggest the parties have reached an agreement as the court case – which bears all the hallmarks of a test case against cryptocurrencies – begins to wind up.
Beleaguered Ripple and its native XRP cryptocurrency has struggled under the weight of the SEC allegations after financial officers branded the organisation an unregistered security before launching action early last year.
The cryptocurrency – highly popular in both the US and UK – had been on a steady upward curve until the allegations surfaced towards the end of 2020. XRP had been looking strong at almost 70 cents a unit before the SEC made its feelings known on December 22 2020. Within 24 hours it had fallen below 25c.
Remarkably, the price of XRP has endured the case with impressive fortitude, currently trading at $0.74, although it did reach a high of $1.84 last April. It’s all-time high of $3.12 came in January 2018.
The SEC filed against Brad Garlinghouse and co-founder Chris Larsen to the US District Court of Southern New York, complaining that sales of $1.3 billion of XRP by Ripple and its executives from 2013 to 2020 constituted an ongoing unregistered offering of securities. The seven years were, according to the authority, a violation of Section 5 of the 1933 Securities Act.
Garlinghouse was swift to hit back, with his lawyers penning a letter to Analisa Torres – a Federal Judge – stating the litigation represented “regulatory overreach, plain and simple” before explaining the “SEC’s allegations fail for a number of reasons”.
Yesterday, Brad Garlinghouse appeared on Fox Business with Liz Claman and Charles Gasparino to discuss Federal Reserve Chairman Jerome Powell’s latest comments on how cryptocurrencies should be treated. However, his most intriguing comments came at the end of the interview when he was pressed about where Ripple was at with its SEC case.
Before providing an update, Garlinghouse alluded to an interview the previous day in which SEC chief Gary Gensler said he expected the Commission “would lose some cases” as it attempted to establish a legal difference between currencies and security tokens.
“The quick update is that Monday was the last day of expert testimony, expert dispositions etc, and so the case continues to move forward,” he said.
“We’re expecting some decisions from the court, you know, sooner rather than later as it relates to a couple of decisions before the court but, look, it’s moved slowly.
“I think Gary Gensler has continued to go with the narrative that crypto is the Wild West. It’s not the Wild West. Are there bad actors? Yes, there’s bad actors in all parts.”
Garlinghouse’s comments, coupled with Gary Gensler’s admission that the SEC expects to lose some cases, could well be interpreted as a hint that this case is about to be closed.
Whether or not it rules in crypto’s favour is yet to be seen, but the whispering winds of fortune certainly appear to be filling Ripple’s sails.
Meanwhile, Ripple has been, quite properly, guarded on the rumours, offering only: “There isn’t a settlement in the works so there is no further comment we can provide on this.”