In a recent turn of events, the legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has hit a crucial point. The U.S. District Court for the Southern District of New York, led by Judge Sarah Netburn, ruled in favor of the SEC, directing Ripple to share financial statements and contracts tied to “institutional sales” from 2022 and 2023.
This ruling sets the scene for a potentially lengthy legal process.
Ripple‘s Compliance and Appeal Strategy
While Ripple must comply with the SEC’s request as part of the remedies stage, experts predict Ripple will likely appeal to the Second Circuit Court, a move that could stretch the legal battle even further.
The court, faced with the disagreement between both parties on the classification of XRP sales, is diving into financial documents from 2022-2023. The 2023 court ruling distinguished XRP sales on crypto exchanges from institutional sales, raising crucial legal questions.
Read More: Big News Coming For Ripple & XRP – Hints Former Ripple Director
SEC Won’t Budge!
The SEC is holding its ground, reluctant to admit that XRP sales aren’t securities transactions. Their stance aims to preserve authority in the crypto world, fearing a concession could weaken positions in cases against major exchanges like Coinbase and Binance.
Amidst this legal chess game, Ripple has asked for an extension to gather information. While they’ve already submitted some financial documents, they argue that an extra week, until February 20, 2024, is necessary. They assure this won’t prolong the case, as the SEC has time to prepare.
“Ripple is Still in the Game“
Pro-XRP lawyers, including Bill Morgan, question the significance of an 8-day delay in this long legal battle. Morgan emphasizes a critical issue regarding XRP sales to On-Demand Liquidity (ODL) customers, hinting at a potential escalation. On the flip side, attorney Fred Rispoli believes the SEC is targeting Ripple but sees Ripple maintaining an advantageous position.
The ongoing deadlock means the XRP community faces a period of uncertainty until a resolution. Any appeal to higher courts, like the U.S. Court of Appeals, could further prolong the process. The latest update has stirred the XRP community once again, leaving them wondering if more challenges lie ahead.
Also Read: XRPL Under Scrutiny: Will New SEC Rules Cripple the AMM Launch?