SEC vs Ripple: important deadlines approaching

The SEC is not letting up. The first major deadlines loom in the legal dispute with Ripple. What can XRP followers and crypto fans expect?

In the current legal dispute between Ripple Labs Inc. and the U.S. Securities and Exchange Commission (SEC) are approaching deadlines for filing remedy letters. This is a significant development in the legal dispute, which has been ongoing since December 2020 and has attracted much attention outside the crypto world. According to an announcement by attorney James K. Filan on X, the SEC must file its opening letter by March 22, while Ripple has until April 22 to file its response letter. The SEC, in turn, has until May 6 to respond. The legal dispute, which is characterized by controversial statements and procedural maneuvers, is thus approaching a new climax.

The final outcome of the legal battle between the SEC and Ripple will likely have implications for the entire crypto industry, as it could set precedents in terms of regulatory oversight and compliance. Originally, the SEC wanted the token XRP to be fully categorized as a security and thus subject to strict regulatory requirements. Ripple argued that XRP was not a security and that the SEC had also failed to provide Ripple Labs with sufficient reasons for the categorization during the investigation.

What court ruling can Ripple expect?

The San Francisco-based company got a legal tailwind from the competent New York court. In July 2023 Judge Analisa Torres ruled in favor of Ripple Labs and ruled that XRP was not a security in the context of trading on crypto exchanges by retail investors. However, it also ruled that XRP should be considered a security when sold to institutional investors. Since then, the SEC has focused on the latter aspect and the release demanded of financial documents and details of XRP sales contracts. Therefore, even pro-XRP lawyer John Deaton assumes that an agreement between the two parties will be is off the table for now.

He also assumes that a fine against Ripple could be between $10 million and $100 million. That sounds like an immense amount, but is relatable compared to the $1.3 billion the SEC demanded at the beginning of the lawsuit. In addition, Ripple has reportedly paid about US$200 million so far spent on his defense.

Even in the event of a favorable outcome for Ripple, it is not certain that the price of the token XRP will be positively affected in the long run. Regardless of the ongoing legal dispute, tokenomics is highly centralized and the success of Ripple Laps could occur even without the adoption of XRP.