Ripple Lobbying for their XRP Token as the SEC Disputes their “Coin”

03/07/2023 06:44 • Tech Trends • 88 views

On March 7, the ongoing legal struggle between the United States Securities and Exchange Commission (SEC) and Ripple Labs continued with a new court ruling. The court has now ruled on the motion of both parties, and the expert testimony will not be considered in summary judgment and trial. In the judgment, Judge Analisa Torres approved part of the motion and rejected other motions. Neither the plaintiff nor the defendant gained the upper hand. However, one of the key results of the ruling was to exclude Patrick Doody, the No. 1 expert, from testifying on the view of a reasonable buyer of Swiss coins. It is noteworthy that the SEC had previously hired Doody to analyze the expectations of token buyers, but the judge now approved Ripple’s motion to exclude his testimony. Without Doody’s testimony, it is unclear how the SEC will prove that investors have “reasonable” profit expectations for XRP.

The United States court refused the testimony of the SEC’s main witness, and Ripple filed a “reasonable notice” defense according to the latest court decision

Analysis based on this information:

On March 7, Ripple Labs, the San Francisco-based company that created the XRP token, received a mixed court ruling in their ongoing lawsuit with the SEC. The decision of Judge Analisa Torres favored neither party, but it did significantly exclude expert testimony from an analysis of a “reasonable” buyer of Swiss coins.

The legal dispute between Ripple and the SEC began in December 2020 when the regulatory agency filed a lawsuit alleging that Ripple had conducted an unregistered securities offering of the XRP token. The case hinges on the definition of the token as either a security or a digital currency. Ripple argues that their token is a currency, and therefore outside the SEC’s jurisdiction.

The issue of expert testimony has taken center stage in the legal battle, as Ripple and the SEC have hired their own experts to support their respective arguments. The specific expert in question, Patrick Doody, was hired by the SEC to analyze the expectations of token buyers. His analytical insights would have potentially supported the SEC’s case that XRP is a security. However, Ripple’s legal team was successful in getting his testimony excluded, which is a significant blow to the SEC’s case.

Without Doody’s testimony, the SEC may struggle to prove that investors were misled about the potential profits of buying XRP. The exclusion of Doody’s testimony suggests that the judge is skeptical of his analysis and may even believe that XRP is a digital currency. Ripple has been lobbying for their token to be classified as such because it would exempt them from registration requirements, making them free of SEC oversight.

In conclusion, the court’s mixed ruling on March 7 does not provide Ripple or the SEC with a clear advantage. However, Ripple’s successful exclusion of expert testimony weakens the SEC’s case and puts the agency in a difficult position to prove that XRP is a security. The legal struggle between the two parties looks set to continue, and anything could happen if the Doody’s testimony is substituted for compelling evidence that the SEC is yet to bring forward.

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