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First Court Date Set in Landmark Case Pitting SEC Against Ripple Labs

Legal

dailyhodl.com 31 December 2020 02:00, UTC
  
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The New York Southern District Court has set its first court date for the U.S. Securities and Exchange Commission’s case against Ripple.

All parties are directed to appear for an initial pretrial conference with Judge Analisa Torres on February 22nd.

Pretrial conferences are typically designed to help judges organize a case and create a timeline for when pretrial activities will be carried out. The judge may also use a conference to set a tentative trial date.

The SEC says Ripple has illegally sold XRP as an unregistered security from 2013 until now. Its case also names Ripple chief executive officer Brad Garlinghouse and co-founder Chris Larsen in their individual capacity.

“As noted, the Supreme Court made clear in its Howey decision of 1946 that the definition of whether an instrument is an investment contract and therefore a security is a ‘flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.’

At all relevant times during the Offering, XRP was an investment contract and therefore a security subject to the registration requirements of the federal securities laws.”

Ripple says the SEC is wrong on the facts and the law, stating that “XRP holders do not share in the profits of Ripple or receive dividends, nor do they have voting rights or other corporate rights.”

The regulator’s allegations have triggered a swift fallout for the digital asset, which has plummeted from about $0.60 when news of the lawsuit first broke, to $0.21 at time of publishing – a 61% decline.

Featured Image: Shutterstock/Zolnierek


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