When the SEC charged Ripple Labs and its executives of illegal securities offerings back in December, there were many who expected the lawsuit to be wrapped up within a few months. “It’ll be settled out of court,” some said, arguing that a legal battle of such a magnitude is unlikely to go on for long in light of how much both parties have to lose if they come out on the wrong side of the same.
And yet, it has, with every other day seeing a point of contention emerge between the parties at the fore of the lawsuit. On the back of a week which saw the SEC and Ripple argue on the subject of MOU requests and single legal briefs, it would seem that an old issue has reared its head up once again.
In a letter dated the 3rd of May, the SEC wrote to Judge Sarah Netburn seeking an “order that bars the defendants from improper discovery” beyond the limits of the 6 April order. The ruling in question had granted “in large part the defendant’s motion” to compel the SEC to produce internal documentation on the likes of Bitcoin and Ether.
Clarifying that the SEC was not seeking a reconsideration of the aforementioned order, the agency argued that it is the defendants who are seeking to disregard the order by trying to obtain internal SEC discovery. For the same, the SEC cited Ripple Labs’ 28 April letter, a letter which asserted that the plaintiff had “ignored the court’s unambiguous directive to produce a privileged log.”
What’s more, the SEC also argued,
“The Court’s April 6 order did not require the SEC to produce any internal documents, but rather required the parties to meet and confer whether the SEC should produce or enter a privilege log.”
This is an astounding argument to make, especially since it is directly contrary to the defendants’ interpretation of the said order. In fact, according to popular attorney Jeremy Hogan,
The Judge made a very nuanced ruling and now the SEC is trying to say the Judge said "none" and Ripple is saying she said "mostly all." The truth is, she said "some." I think she will rule on this soon without oral argument and smash some heads together (in a polite way). https://t.co/dLElIfznKK
— Jeremy Hogan (@attorneyjeremy) May 3, 2021
What does this latest bone of contention mean for the lawsuit? Well, there’s no clear answer to that question. However, it’s still interesting to consider the possibilities, especially in light of the aforementioned expectations that accompanied the initial filing of the lawsuit.
What does the latest spate of varying, contentious issues mean for the prospect of settlement between the SEC and Ripple Labs? Well, and this is merely speculatory, an argument can be made both in favor and in opposition to the same.
Ordinarily, a long, bitter, hard-fought lawsuit has a high probability of being settled outside the court. Legal costs don’t come cheap, even if you’re the SEC or one of the world’s foremost blockchain firms. Also, despite the plaintiffs and defendants claiming otherwise, every passing week has had an impact on the parties’ credibility and reputation. The longer this goes, the more the chances of either of these two aspects taking a hit. Ergo, a settlement might not really be out of the question.
On the other hand, a settlement might not be an option here since this isn’t exactly an ordinary lawsuit. Since it was first filed in December, the defendants have been very careful about framing this as a battle against “wholly inappropriate overreach,” as a battle of “us v. them.”
Ripple Labs, by asserting that the ruling, in this case, could have grave implications for the larger crypto-community has galvanized opinion and support. In light of recent “small victories” and what all is riding on in this case, it only makes sense for the defendants to go the extra mile.
As an FYI, my hopes for a speedy settlement go down slightly each filing because there appears to be some real animosity. With that said, if Ripple keeps winning the little battles, you may see the SEC give in at some point.
— Jesse Hynes (@jesse_hynes) April 30, 2021
What’s more, the newly-appointed “crypto-friendly” Gary Gensler is expected to chair his first closed-door SEC meeting on the 7th of May. On the agenda, among other things, is the question of institution, settlement, and resolution of pending injunctive actions and litigation claims. While there is no mention of Ripple anywhere, many in the community believe that this could pave the way for settlement talks in the future.
The answer to the aforementioned question could have a significant impact on how XRP, the cryptocurrency at the center of the lawsuit, does on the price charts too. Back in December, the crypto fell by over 50% after the SEC first filed charges. It has, however, recovered extraordinarily since, especially on the back of positive developments in the said case.
Ergo, it isn’t impossible that a positive ruling or even a settlement outside of court could have a positive impact on the performance of the altcoin.