XRP lawsuit: What’s the ‘existential threat’ Ripple is facing?
At the moment, the ongoing SEC v. Ripple Labs case is threatening to digress into a series of motions and counter-motions. Less than a week after the SEC requested the court for a 60-day extension of discovery, the defendants have hit back with a response of their own. At the time, the regulatory agency had argued that Ripple was having difficulties in producing “responsive documents,” with the ones already in its possession badly “incomplete.”
In fact, the SEC also contended that such an extension would not delay the trial or place any undue burdens on anyone.
Ripple Labs, understandably, feels differently, however, with the defendants filing their opposition to the SEC’s request for the said extension a few hours ago. In the same, the defendants accused the agency of “misstating” the former’s opposition to such a request. The SEC had asserted that Ripple’s opposition is borne out of its wish to head to summary judgment as soon as possible.
According to Ripple, however, that’s not true, with the defendants claiming that their opposition to such a request is based on how prejudicial granting it would be to the defendants. What’s more, in the same filing, Ripple Labs also argued that the SEC had not produced any good cause to modify the discovery schedule.
In a recent video discussing what a settlement between Ripple and the SEC would look like, attorney Jeremy Hogan had suggested that Ripple would need assurances that it will be able to maintain its business and ODL, with the civil penalty not being significant enough to induce bankruptcy.
Ripple, in its latest filing, has reiterated the importance of the same, with the defendants contending,
“Delay in this litigation poses an existential threat to Ripple’s business in the United States”
Going on to cite how the pendency of the lawsuit has significantly hurt XRP’s markets at home and abroad and the liquidity associated with the crypto-asset in the United States, the defendants also argued that Ripple’s ability to manage and develop ODL worldwide has been damaged.
“Every additional day this suit is pending is a day in which the XRP markets remain improperly frozen in the United States and Ripple’s business is unfairly hampered. This is severely prejudicial to Ripple, and the SEC’s extension motion does not even mention it, much less explain why the proposed delay would not harm Ripple.”
What’s more, the present filing also asserted that the SEC has been unable to produce good cause to modify the scheduling order. In fact, according to Ripple, the agency’s contention that a lot of time has been expended on motions practice fails to take into account that it was mostly of its own “(improper) making.”
The Best Part of this opposition by Ripple is when it points out that many of delays the SEC complains of were caused by the SEC itself – eg. Failing to turn over docs related to BTC/ETH's status as a security after being told twice by the Judge. …legal Judo! https://t.co/YhhikhZJzw
— Jeremy Hogan (@attorneyjeremy1) June 9, 2021
In its letter dated 2 June, the SEC had stated that courts usually extend discovery deadlines for movants who have been “diligent” in attempting to meet existing deadlines. Addressing the same, the defendants argued,
“There is no dispute that discovery in this litigation has been extensive. That does not support a conclusion that the SEC has been diligent.”
Performing a baseline level of work that any litigant would do does not establish the SEC has been “diligent,” the opposition memo went on to conclude.