Magistrate Judge Sarah Netburn has charted a new path for the Ripple vs. SEC case by issuing a scheduling order. Ripple Labs is contesting the SEC’s severe penalties and proposing a $10 million settlement. In a recent development, Magistrate Judge Sarah Netburn, after being appointed as District Judge, issued a new scheduling order for the ongoing lawsuit between Ripple Labs and the SEC. A report by CNF states that this order sets deadlines for the SEC to respond to Ripple’s motion to dismiss expert submissions by April 29, 2024. Ripple will then have three business days to reply. This marks a crucial moment in the case, indicating intensified legal proceedings.
Ripple’s stance on penalties and the classification of XRP is in the spotlight. As highlighted in today’s CNF YouTube update, Ripple Labs is challenging the SEC’s demand for substantial civil penalties and instead proposes a more reasonable penalty of $10 million. Ripple argues that the SEC lacks evidence to support its claims and asserts that its On-Demand Liquidity (ODL) sales should not be considered investment contracts. According to Ripple, these sales primarily facilitate cross-border payments, contradicting the SEC’s view of XRP as an investment. Ripple claims that no financial harm or risk of future violations has been demonstrated, citing the Govil case to strengthen their argument.
The function of Ripple’s ODL service is a crucial aspect of their defense. Ripple argues that ODL’s market sales are transactional, not investments, as XRP is held for only a few seconds to facilitate cross-border payments. This positions ODL as a tool for efficient transactions rather than an investment vehicle. Legal commentator James K Filan highlighted this in a recent tweet, sharing details about the ongoing legal maneuvers surrounding Ripple’s motion to strike new expert materials submitted by the SEC.
Discussions on social platforms like X have emphasized that ODL transactions should not be seen as investment contracts. Blockchain advocate Bill Morgan recently explained that ODL customers engage in a swift exchange of XRP for fiat to execute low-cost money transfers, not to invest in XRP.
Despite the legal and regulatory discussions, XRP’s market performance has remained resilient. Currently trading at $0.5333, XRP has risen by 1.23% over the last day and 10.24% over the past week. This positive trend reflects cautious optimism from investors regarding the outcome of Ripple’s legal challenges.
These strategic legal defenses and Ripple’s unwavering position against the SEC’s allegations play a pivotal role in shaping the future of XRP and its classification within the broader context of cryptocurrency regulations.