The U.S. Securities and Exchange Commission (SEC) brings the court’s attention to a recent ruling in the Ripple class action, leveraging the Ripple XRP case in the Binance lawsuit. It follows as a legal opinion by a California district court judge exhibiting significant divergences from an SDNY judge’s decision that programmatic sales of XRP are not securities.
SEC Files Ripple Lawsuit As Supplement Authority in Binance Suit
In the latest filing by the U.S. SEC in the District Court of Columbia, the securities regulator submitted Ripple class action lawsuit as a supplemental authority. The SEC claims the argument and judge’s opinion in the Ripple lawsuit are relevant to the court for ruling in the lawsuit against Binance, Binance.US, and former CEO Changpeng Zhao.
The Binance lawsuit is near the end of discovery and deposition phase, as the parties have resolved most discovery disputes. The lawsuit is currently seeking the court’s ruling on several motions, including a joint motion to dismiss the lawsuit.
Judge Hamilton in In re Ripple Labs, Inc. Litigation ruled in favor of Ripple, dismissing most arguments by the plaintiff against Ripple over securities violation. However, a trial on misleading statements for XRP sales by Ripple CEO Brad Garlinghouse will remain for trial.
Ripple CEO Garlinhouse in a recent post regarding misleading statements cited in the case, said “I stand by what I said and am looking forward to shedding light on that during the trial.” He added that the sole plaintiff who owns a few hundred XRP didn’t even buy it directly from Ripple and “can’t say if he even heard the statement before he traded.”
Read More: Ripple XRP Lawsuit Referred To Magistrate Judge For Settlement
SEC Spotlights Judge Hamilton’s Opinion on XRP Security Status
Judge Hamilton sidelined the SDNY court’s ruling that XRP programmatic sales are not securities, raising debate in the XRP community. The judge ruling on the third Howey test prong was objective, which also added that “programmatic buyers may have purchased XRP with the expectation of profits to be derived from Ripple’s efforts.
The SEC also seeks the court’s attention towards Ripple CEO’s misleading statements regarding XRP. The biggest concern for Ripple is the SEC using this California case in the Second Circuit in its appeal against Judge Torres’ summary judgment on XRP. But for that, the court must first decide whether XRP sales were securities.
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