The New York Southern District Court has set in motion the landmark case between the U.S. Securities and Exchange Commission (SEC) and Ripple by announcing that the initial pretrial conference will take place on Feb. 22, 2021.
District Judge Analisa Torres has directed the plaintiff and the defendants to attend the conference telephonically due to the ongoing coronavirus pandemic and the measures that have been put in place to curb its spread.
The two parties are required to submit a joint letter by February containing “(1) a brief description of the case, including the factual and legal bases for the claim(s) and defense(s), (2) any contemplated motions and (3) the prospect for a settlement.”
The securities regulator filed a lawsuit against Ripple and two key executives on Dec. 22. Ripple, CEO Brad Garlinhouse, and Executive Chairman Chris Larsen were charged by SEC with raising more than $1.3 billion through an ongoing and unregistered sale of XRP tokens.
“From at least 2013 through the present, Defendants sold over 14.6 billion units of a digital asset security called “XRP,” in return for cash or other consideration worth over $1.38 billion U.S. Dollars (“USD”), to fund Ripple’s operations and enrich Larsen and Garlinghouse. Defendants undertook this distribution without registering their offers and sales of XRP with the SEC as required by the federal securities laws, and no exemption from this requirement applied,” the SEC claimed in its complaint against Ripple and its principals.
This shows that the SEC deems XRP cryptocurrency to be a security.
Ripple and Garlinghouse are not new to court cases. A group of investors previously filed a class-action lawsuit against Ripple and its CEO, citing that they did not register the XRP cryptocurrency as a security with the SEC and made some false statements about the digital asset.
Ripple and Garlinghouse not taking the lawsuit lying down
Garlinghouse has come out guns blazing to defend Ripple and himself over the charges leveled against them. He claims innocence and maintains that “the SEC’s theory, that XRP is an investment contract, is wrong on the facts, the law and the equities.”
Ripple recently published an article saying that the SEC’s filing of the action is not just about Ripple but an attack on the crypto industry in the U.S.
Cryptocurrency exchanges are delisting XRP markets from their platforms while the token continues to plummet.