SEC scores a minor victory in legal dispute with Ripple Labs
“The filing of the Individual Defendants’ Answer is the triggering event. When the Answer is filed, even if before April 8th, the date the Answer is filed starts the two week clock running for the filing of the SEC position on discovery” said lawyer James K. Filan.
The U.S. Securities and Exchange Commision (SEC) has been granted an extension to submit a discovery schedule relating to individual defendants Brad Garlinghouse (CEO) and Chris Larsen (co-founder) as part of the case against Ripple Labs.
The bitter legal dispute has been going since late December 2020, after the SEC alleged that Ripple Labs generated $1.3 billion from an unregistered security offering via its XRP token. The firm denies that XRP is a security and is instead a method for international payments, and has argued that the SEC failed to give Ripple fair notice that its token was a security.
While the ruling in favor of the SEC in this instance marks a small win, some onlookers have suggested that the enforcement body is dragging its heels and slowing the case down to frustrate Ripple Labs.
The latest development was highlighted by defense lawyer and former U.S. federal prosecutor James K. Filan, who cited a text only order from the Court earlier today.
“The SEC shall inform the Court of its position on whether any additional discovery is required within a week of the filing of the Individual Defendants,” the order read.
As part of the delayed schedule, the defendants now have until April 8 to submit an answer to the SEC’s complaints, while the SEC’s decision on additional discovery is due the following week on April 15, and joint proposed scheduling order is also due on April 22.
However the dates are not set in stone, and could change depending on how fast Ripple Labs moves, with Filan noting that:
“The filing of the Individual Defendants’ Answer is the triggering event. When the Answer is filed, even if before April 8th, the date the Answer is filed starts the two week clock running for the filing of the SEC position on discovery and the Joint Proposed Scheduling Order.”
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The XRP community reaction to the post was mixed, with some expressing anger at the SEC as “just trying to gain time in a case already lost,” while others such as Twitter user “r ColeTheMailman” suggesting that the delays could be good for XRP in the long run.
“This is a good thing, SEC will have no excuse as to timelines and more delays after a schedule has been confirmed. Also they will not be able to say they were rushed when and if it comes down to summary judgment,” he said.
This is enforcement by litigation. The SEC was not prepared, but the court is not holding it against them. Everyone including the judges are learning as they go. Think about how many people still don’t understand crypto. Every extension request gives the court more time to learn.
— Swish (@honeynutcherri4) March 23, 2022