Ripple Labs, the U.S. technology company behind the XRP crypto, remains embroiled in a lawsuit with the SEC over allegations that its executives engaged in $1.3 billion of trades in unregistered securities. The legal fight has impacted the price of XRP, which fell as low as 18 cents before recovering to now trade at 76 cents. Several leading cryptocurrency exchanges and trading services have stopped offering XRP while the SEC lawsuit works its way through the courts.
However, proponents of the XRP crypto are cheering the latest twist in the courtroom drama after a federal judge ruled that the SEC must turnover to Ripple a key email that could benefit the cryptocurrency developer’s defense.
What Happened With the XRP Crypto
Judge Sarah Netburn of the Southern District of New York ruled that the SEC must surrender to Ripple an email with a draft of former director William Hinman’s speech on whether Ethereum (CCC:ETH-USD) is a legitimate security. The decision is significant because it opens the door for Ripple to gain access to numerous SEC documents that the Wall Street regulator had, until now, claimed were “privileged information” and should not be entered into court as part of the discovery process.
Gaining access to the email and some related notes could help Ripple in its defense and provide insights into how the SEC and its senior leadership view cryptocurrencies and trading in digital coins and tokens. In its legal action, the SEC accuses staff of Ripple of selling the XRP cryptocurrency in violation of federal securities law as XRP is not currently classified as a registered security.
Why It Matters
The judge in the case ruled against the SEC and in favor of Ripple, and the decision provides Ripple’s legal team with access to documents that could shed light on how the regulator thinks about digital coins and tokens such as XRP. The lawyers for Ripple will be parsing these documents for information that can help the cryptocurrency developer prevail in court.
The positive legal development is also potentially good news for the price of XRP, which has risen or fallen over the last year on every development in the SEC case. Over the last 12 months, XRP’s price has swung from a low of 25 cents to a high of $1.96 before settling at its current level of 76 cents. The cryptocurrency’s price was unchanged at the time of this writing.
The legal saga that has become “The United States vs. Ripple” is by no means over. The court battle could drag on for many more years to come. And while it is ongoing, a cloud will continue to hang over XRP. But the latest development in the case clearly favors Ripple and its defense and that is good news for investors who are bullish on the digital asset.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.