The United States Securities and Exchange Commission’s [SEC] lawsuit against Ripple and its executives has been widely discussed, with the nature of XRP debated extensively as well. While the case feels like yet another securities case, it is different in a lot of aspects, especially since in none of the other cases, namely Kik or Telegram, were the executives sued too.
Ripple’s Brad Garlinghouse and Chris Larsen are facing a lawsuit against them, one filed by the SEC for illegal securities offerings. Interestingly, the filed charges have steered away from charging the executives with “fraud.” However, according to the attorneys in attendance during a recent Laura Shin podcast, there is no need for the SEC to bring in a “weaker claim.”
In fact, Stephen Palley, partner at Anderson Kill, believes that the case is most likely to be settled.
One might argue that in the present case, XRP holders are the real victims, especially since they are the ones surrounded by uncertainty. According to Gabriel Shapiro, partner at BSV Law, XRP could redeem itself if Ripple becomes an SEC-reporting company or exchange act reporter.
“…I would think is a much more reasonable remedy is that Ripple becomes an exchange act reporter […] basically an SEC reporting company like Apple or like any other public company.”
Although this would kill the utility of the digital asset XRP, as per Shapiro, there will still be ways to generate value from XRP. While he conceded that there will be challenges in keeping the coin’s value or finding new utility for it as potential security, he questioned,
“Is completely destroying it for sure really better than giving it some fighting chance?”
Although the case is a heavyweight, its results may not contribute to many changes in the crypto-ecosystem. Most businesses in the space can and will differentiate themselves from others in multiple ways. Palley and Shapiro believe that “self-denial” and “maneuverings to try to make each new circumstance look as different as possible from the last” are just a part of the culture.
This will prevent any major changes from being visible in the crypto-verse, with one of the attorneys claiming that there will “be a lot more blood in the water,” before something dramatic happens.
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