Ripple, the company behind the XRP cryptocurrency, has made a small profit in the controversial lawsuit with the US Securities and Exchange Commission (SEC).
Ripple is currently being sued by the SEC over the illegal sale of $1.3 billion in securities, or securities, with XRP. Ripple’s attorneys want William Hinman, the SEC’s former director of corporate finance, to make a statement in court.
Hinman said during a speech in 2018 that ether (ETH) are not securities due to the decentralized nature of the Ethereum network. Ripple hopes that after a statement from Hinman they may also be able to apply this logic to XRP, although the central nature of this crypto will still be a stumbling block.
The SEC recently filed a motion against Ripple’s request. According to the financial regulator, the request would set a dangerous precedent. According to the SEC, it could open the “floodgates” for many companies willing to make such an attempt and could lead to a series of subpoenas for SEC officials. It could also prevent future SEC officials from filling such a public position.
Judge Sarah Netburn disagrees and therefore denied the SEC’s motion. Bloomberg news agency reported this on July 16:
Ripple Labs can depose a former SEC official about the agency’s policy decisions as the company fights a lawsuit accusing it of misleading investors https://t.co/sL2ZCQkzba
— Bloomberg (@business) July 16, 2021
According to the judge, this is not an “average enforcement case” and the deposition of Hinman will not immediately “open the floodgates.” She adds that the lawsuit “brings important policy decisions to the market,” and that the amount and public interest in the case is “significant.”
That means that Ripple’s lawyers can still have Hinman testify. However, the SEC still has the option to appeal the judge’s decision.
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