The ongoing Ripple Labs vs SEC case appears to be helping Ripple Labs after it was revealed that some of the recent SEC filings have been denied by the court.
What will be the Fate of the Crypto Industry After the Lawsuit?
Brad Garlinghouse, CEO of Ripple, previously announced that the company intends to go public and said the company will consider listing on the stock exchange once the SEC lawsuit is closed:
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first, and we’re not going to be the last, but I expect us to be on the leading side. It’s a natural evolution for our company.”
However, no update has been provided regarding Ripple’s potential IPO. Until recently, Yoshitaka Kitao, CEO of SBI Holdings and Ripple’s largest shareholder, announced on the conference call that Ripple executives plan to go public once the SEC lawsuit is fully resolved.
The latest news this week is that Sarah Netburn, the judge on the case, has denied three-quarters of the SEC’s filing. The U.S. Securities and Exchange Commission’s motion to provide additional testimony, search additional custodian records, and force blockchain companies to provide post-complaint transaction records and lobbying activities was overwhelmingly denied. Despite restrictions, only US securities transactions were approved, the first proposal from the regulators.
While the SEC may still win the case, according to some commentators, the overall loss may not be as damaging as originally expected. Attorney Jesse Hynes followed the case and commented on a Twitter post:
“So, a result of this lawsuit could be learning that while Ripple sales are investment contracts, secondary sales aren’t – meaning that exchanges can relist. Then Ripple will just continue selling outside of the U.S and everything will resume as normal.”
Regardless of the outcome, the result of Ripple Labs’ battle against the Securities and Exchange Commission will have an impact on the entire crypto community. If Ripple Labs manage to win their defenses based on their fair notice defense, it will lead other cryptocurrency companies to use this to claim that their respective tokens are also legal precedents for currencies, not securities. However, if the SEC wins, other similar crypto companies will face legal proceedings.