- Trial Anticipation: The crypto world awaits the slated SEC vs. Ripple trial, questioning Ripple executives’ distribution of XRP as an unregistered security.
- Legal Speculation: Leading crypto attorneys, including Fred Rispoli, forecast that the trial might not transpire, revealing six significant reasons behind their belief.
Behind the Ripple and SEC Legal Curtain
The potential courtroom drama between the Securities and Exchange Commission (SEC) and Ripple executives, namely Brad Garlinghouse and Chris Larsen, has garnered significant attention. This legal tussle primarily revolves around allegations from the SEC, accusing both executives of assisting Ripple in circulating XRP without registering it as a security. Though the court has delineated a summary judgment, a jury trial against the Ripple figures awaits in Q2 2024.
Seeing many out there speculate the @bgarlinghouse @chrislarsensf trial won't happen. For many reasons, I agree. First, it's painfully obvious that suing those two initially was only to pressure @Ripple into a weak settlement position. Two, imagine Hinman…1/5
— Fred Rispoli (@freddyriz) August 24, 2023
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Unraveling the Six Legal Predictions
Fred Rispoli, a prominent figure in crypto legal circles, has put forth a compelling argument outlining six reasons that might deter the anticipated trial from unfolding:
- SEC’s Strategic Move: Rispoli accentuates the SEC’s original lawsuit against Garlinghouse and Larsen as a tactical move, designed to push Ripple towards a favorable settlement. Given that the court’s recent decision saw Ripple emerge victorious in two-thirds of the SEC’s allegations, the settlement angle loses its edge.
- The Hinman and Clayton Factor: Rispoli alludes to potential courtroom appearances by former SEC authorities, William Hinman and Jay Clayton. Their involvement in the previous administration could position them as witnesses, presenting an unwelcome situation for the SEC.
- Questioning the SEC’s Recklessness Claims: Drawing from the court’s past verdicts, Rispoli points out Ripple’s capacity to employ the court’s distinction between its institutional and programmatic XRP sales to challenge the SEC’s recklessness allegations.
- Evidence Lacks Conviction: The discourse surrounding Ripple’s domestic vs. international XRP sales might prove feeble, as per Rispoli. The SEC’s argument in this regard appears to be tenuous.
- Internal Shuffles within the SEC: The regulator’s recent internal restructurings, including the replacement of significant trial team members, introduces additional complexities. Notably, senior trial counsel, Pascale Guerrier, has withdrawn from the case.
- Excessive SEC Engagements: The SEC’s involvement in multiple consecutive trials could hinder its readiness for an immediate confrontation with Ripple executives.
SEC’s Fading Bargaining Position
Deepening the intrigue, Rispoli brings to light the SEC’s pivot towards an interlocutory appeal. If this appeal doesn’t gain the court’s nod, the regulatory body might find itself in a precarious position. Rispoli aptly notes, “The SEC went all in,” hinting at the regulator’s dwindling options if its “Hail Mary” fails to score.
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