By Alicia Maher
The legal ruse between the US SEC and Ripple, the blockchain tech firm behind the XRP token continues to drag on without a foreseeable resolution. However, experts have posited that Ripple is likely to emerge victorious in light of the recent own goals the US regulator has been scoring. The latest is an admission from the US SEC that it failed to respond to the probing requests of third parties about XRP.
These experts have alleged that the latest admission is fatal to the case of the regulator. Conversely, it is a victory in the camp of XRP and has gone ahead to strengthen its case as the defendant. According to reports, before filing the legal proceedings against XRP, the commission defaulted on informing third parties about the status of the seventh-largest cryptocurrency by market capitalization. Thus, the silence on its part would most likely have been interpreted as a response in the negative to the inquiries.
SEC Evidence Plea Against Ripple Meets Dead End
This comes on the heels of a plea made by the US SEC to the court to compel Ripple to produce certain documents it counted as relevant to the case. The request was not honored as Ripple had attached stringent conditions to the submission of recordings of meetings alleged to have been convened with staff members who were not privy to them. Ripple’s condition had been that the regulator would be stopped from compelling future evidence. Drawing from the suppositions on the US SEC’s current admission, how does it strengthen Ripple’s case?
Earlier in the case, Ripple had sought to inquire from the US SEC if the largest altcoin, Ethereum, is a security. As of press time, the regulator is yet to respond. Still, its delayed response is deliberate due to the significance of any answers the commission gives.
US SEC Loses Argument to Ripple to Multiple Fronts
Whether in the affirmative or negative, it weakens the defense of the commission. If the US SEC says yes, it is not likely that it would be willing to walk that path because Ethereum conducted an ICO in 2017. A negative answer would mean that XRP could then be compared to Ethereum, thereby loosening the hold of the regulator on Ripple since no suit had been instituted against Ethereum. Also, a lawsuit may be statute-barred if the commission considers that option.
Another perspective to the supposition is that no fair notice- as provided by law- was given to the XRP. It notes that XRP might have acted under the presumption that it was in the same class as Bitcoin and Ethereum before going ahead to sell the ‘unregistered securities’ valued at $1.3 billion. The admission that it failed to shed light on the type of asset that XRP translates into a separate admission that no fair notice was issued. Summarily, the foundation of the commission’s case is waterlogged. The coming months are promising and Ripple looks poised to win the suit.