During the preliminary hearings in the SEC vs. Ripple case, lawyers of the fintech startup said the Commission should have warned market participants that XRP is a security.
The process took place in the format of a conference call and anyone who wanted to dial a certain number at the right time could participate in the process. Cryptocurrency supporters recorded the meeting, which ended with a cry of “XRP to the moon”. At the time of this writing, the video is blocked by the copyright holder.
Important details in the SEC vs. Ripple case
Ripple CEO Brad Garlinghouse was represented by Matthew Solomon of Cleary Gottlieb, a law firm. During the hearing, he stated that the status of the XRP token was discussed many times during 2019 and earlier. However, the Commission has never warned market participants, including exchanges, that it qualifies as a security.
“We found out that the Securities and Exchange Commission consulted with experienced market participants, including exchanges, and apparently did not tell them as of the end of 2019 what it considers XRP to be a security or investment contract. Again, in the course of the proceedings, these facts will come to light, and it will become clear that XRP cannot be considered a security. “
The defense refers to the fact that during the investigation, a certain exchange was discovered that consulted with the SEC about the status of XRP before listing the coin. However, the regulator did not give a conclusion that the token is a security. The name of the exchange was not announced.
Some community members consider this fact to be the main one in the whole case, proving the unfoundedness of the SEC’s claims against Ripple and its leaders. However, not everyone shares this opinion, noting that there is too much understatement and assumptions in the case.
Ripple petitions to dismiss claim
Garlinghouse has already filed a motion to dismiss the Commission’s claim, Solomon said.
The lawyer denies that the company’s management manipulated prices and contributed to the token sale – this accusation is at the heart of the amended SEC lawsuit. However, he insists that his client did not know that XRP could potentially be classified as an investment contract:
“The SEC’s statements are the opposite of the reality. Garlinghouse did not know or did not consider the possibility that the XRP token could be regarded as an investment contract. “
Former Ripple CEO Chris Larsen was represented by attorney Martin Flumenbaum of Paul Weiss. His client also intends to raise this issue in the motion to dismiss the claim.
George Gerardo Tenreiro, John Daniels, and others were on the side of the SEC. They continue to insist that the company issued and sold an unregistered security.
The meeting lasted about 30 minutes. The results of the preliminary hearing are not yet known.
XRP price outlook
XRP has lost more than 27% over the past 24 hours and is trading at the $0.43 level. At the time of this writing, the coin ranks seventh in the cryptocurrency market capitalization rating.
On Monday 22, XRP was the only digital asset from the top 15 that has managed to strengthen its position while trading at $0.62. One of the growth drivers was the news that Ripple registered a company in Wyoming.
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