Ripple Labs has been in a legal battle with the United States Securities and Exchange Commission (SEC) for over two years. The SEC charged Ripple and two of its executives, Chris Larsen and Bradley Garlinghouse, with offering unregistered securities in the form of XRP. The regulator alleged that the company raised $1.3 billion through the sale of XRP. The parties have been filing the final rounds of briefs seeking summary judgment.
Ripple Labs has provided an update on its ongoing lawsuit with the SEC in its quarterly market report (Q1 2023). The report analyzed the state of the crypto markets, especially issues related to its businesses. It highlighted the on-chain activity of XRP Ledger (XRPL), its quarterly XRP sales, On-Demand Liquidity (ODL) transactions, etc.
The report also provided an update on the SEC lawsuit, emphasizing the March 6, 2023, order issued by Judge Analisa Torres. The order decided which SEC and Ripple’s expert opinions the court might consider in summary judgment.
Update on the SEC Lawsuit
According to Ripple, the court struck from the record the opinion of one of the SEC’s experts who testified on the reasonable expectations of XRP purchasers. In the same vein, the testimony of another SEC expert who also tried to determine what caused a change in XRP price was also struck from the record.
Members of the cryptocurrency community, including XRP enthusiasts, have eagerly anticipated Judge Torres’ summary judgment on the case. In its Q1 2023 financial report, Ripple stated that it expects the summary judgment decision to come before the end of the year. However, it asserts that the summary judgment “timing is ultimately up to the court.”
Crypto enthusiasts have made wild guesses on when Judge Torres may issue a ruling. Pro-XRP lawyer James K. Filan had predicted that the judgment would come by March 31, but it did not come to pass as many expected. Attorney John Deaton recently predicted that the summary judgment on Ripple vs. SEC might come on or before May 6, 2023. Additionally, Ripple’s CEO speculates that the ruling might come within the first half of 2023.
Ripple Labs has fired shots at the United States’ approach to crypto regulations. According to the blockchain company, the United States has continued to focus on regulation by enforcement instead of establishing clear rules for its crypto industry. It cited a few instances where US regulators have opted for enforcement actions over embracing rulemaking.
Ripple pointed to the SEC issuing Wells Notice to Paxos and Coinbase. Furthermore, it highlighted the lawsuit filed by the Commodity Futures Trading Commission (CFTC) against Binance and its CEO, Changpeng Zhao (CZ). The CFTC alleged that Binance and its CEO violated US trading and derivative laws.