Crypto enthusiasts are patiently waiting for a win, seeing as 2022 has been particularly unkind to the industry. Locked in a crypto winter with investor trust tanking, something needs to right the ship. Ripple (XRP-USD) could do just that. The company behind the XRP crypto is finally seeing an end to its Securities & Exchange Commission (SEC) court battle. The crypto market might get a catalyst if Ripple can pull off a win.
It’s been a long road for Ripple. The SEC opened its complaint against the company in December of 2020. Since then, Ripple has been diverting resources from its business to fight accusations. The accusations revolve around whether XRP is a security; if the court rules so, it would mean that Ripple has illegally sold securities, according to established U.S. law.
A hefty punishment awaits the company if it loses in court. And, in the midst of a wildly bearish market, the financial hit to Ripple would be massively amplified. Luckily for it, though, the SEC has been less successful in making this an open-and-shut case than it thought it would be.
Ripple has been able to exploit the SEC’s disjointed public opinion over what qualifies a crypto as a security versus a currency. The main piece of evidence used by Ripple are the “Hinman documents” — internal SEC communications related to a speech by former director William Hinman. In 2018, Hinman made a speech in which he refuted the idea Ethereum (ETH-USD) was a security and implied most cryptocurrencies on the market are not securities, either.
Using these documents, Ripple is attempting to prove the SEC has communicated internally in a way that would absolve Ripple from the suit’s accusations.
XRP Crypto Lawsuit Coming to an End in Early 2023
After the nearly two-year long battle, the XRP crypto lawsuit is finally coming to an end. The two parties are ready for final judgement, and the result will certainly have a broad-reaching effect on the market.
It has been just over a month since Ripple’s big win of getting the Hinman documents introduced in the courtroom. With that piece of evidence secured, Ripple is now filing a final request for summary judgement. Ripple’s general counsel has confirmed on Twitter that this is the last filing Ripple will make. Now, things are up to Judge Analisa Torres. Summary judgement for the case, according to former prosecutor James Filan, will take place “on or before March 31, 2023.”
Filan’s date is simply a prediction at the end of the day. But, as a former expert who has been through these processes countless times before, it’s perhaps the best guess investors will find. Regardless, simply knowing both parties are finished with filings offers more proof that the end is nigh than any previous speculation.
This ruling has great consequences for the crypto market either way. If the SEC wins, the ruling will reiterate a precedent established by its success last month. In November, the commission won a court case against LBRY (LBC-USD) which very closely mirrored the argument it makes in the Ripple suit. A victory over Ripple will give the body even greater regulatory power over the crypto market.
Ripple seems to have all the momentum, though. It could save most of the market from the SEC with its own victory. Such a high-profile case will most definitely be considered in regulatory laws going forward. If XRP can prove it’s a crypto rather than a security, it would suggest that most other cryptos are, too. This would effectively strip most crypto regulating power from the SEC.
On the date of publication, Brenden Rearick 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.