On Friday, Ripple’s XRP gained 10%, defying the larger crypto market trend. XRP received support from news updates on the Ripple v SEC lawsuit, but the rest of the crypto majors followed the US equities markets into the red. After a long wait, the cryptocurrency has suddenly re-entered the top five by market capitalization. Despite the huge victory, the legal war still continues.
Analisa Torres, a judge in the United States District Court for the Southern District of New York, has dismissed Ripple CEO Brad Garlinghouse and co-founder Chris Larsen’s simultaneous applications to dismiss the SEC case filed against them in December 2020, dealing a setback to the individual defendants. The motions were filed last April by two top Ripple executives.
The agency has convincingly asserted that Garlinghouse and Larsen acted carelessly by ignoring the circumstances “that allegedly made Ripple’s XRP amount to the unregistered sale of securities,” according to the court. The SEC has also “plausibly demonstrated” that the defendants conducted domestic token offers. Furthermore, the court dismissed the notion that their sales were mostly international.
The SEC’s motion to strike Ripple’s make-or-break “fair notice” defence was also refused by the judge. At this point in the case, the court “must not decide” that Ripple’s affirmative defence is invalid. The judge claims that the continuation of the defence will not cause “undue prejudice” to the agency.
Ripple’s general counsel, Stuart Alderoty, has already weighed in on the decision to deny the SEC’s request to strike, arguing that there is a “real question” about whether the agency provided the business with adequate notice.
Without commenting on his failed petition to dismiss the complaint, Garlinghouse moved to Twitter to laud the “fair notice” finding as a “major win” for the defendants.