Cardano creator Charles Hoskinson had a very interesting take during his recent ask-me-anything (AMA) session on YouTube. He said the latest rumour doing the rounds in the cryptosphere is that Ripple’s drawn-out court battle with the United States Securities and Exchange Commission (SEC) could reach a conclusion as soon as next week.
XRP Suit Verdict Nearer Than We Thought?
We could soon find out whether Ripple, the blockchain payments company affiliated with the XRP cryptocurrency, violated federal securities laws. This is after Cardano founder Charles Hoskinson said he had heard rumours that the SEC lawsuit against Ripple could come to an end on December 15th.
The SEC sued Ripple, CEO Brad Garlinghouse, and Chairman Chris Larsen in December 2020 (just a day before former SEC Chairman Jay Clayton resigned from his role) on allegations that it had raised around $1.3 billion by selling XRP in unregistered securities trades. Ripple maintained that XRP sales did not meet the tenets of the infamous Howey Test, a foundational set of standards to determine whether something is a security.
For its part, one of Ripple’s arguments was that there was no formal contract between the company and XRP purchasers and that there was no common enterprise, one of the conditions under Howey.
Hoskinson notes that the outcome of the high-profile crypto case is likely to have “catastrophic” implications for the already shaken sector.
Both the SEC and Ripple recently exchanged duelling motions before U.S. District Judge Analisa Torres, urging her to rule in their favour without sending the case to trial. Those final briefs requesting summary judgment bring the lawsuit closer to a court ruling that could determine what digital assets are deemed securities in the United States.
The judge could accord either party a win without trial. Ripple has recently scored multiple procedural victories against the SEC, but some observers are not convinced the blockchain firm will ultimately win the battle.
As ZyCrypto covered recently, Chia Network COO Gene Hoffman suggested that the judge will rule in favor of the SEC since the securities watchdog has not lost a Section 5 case in decades. Hoffman also pointed out that the company behind the decentralized platform LBRY recently lost a similar fight against the SEC in a major blow to the industry.
That being said, Hoskinson’s remarks should not be taken as gospel truth given that Ripple boss Garlinghouse previously tipped the suit would be concluded in the first half of 2023, though it could take longer.