Ripple, the San Francisco-based blockchain payments firm, has been engaged in a legal battle with the U.S. Securities and Exchange Commission (SEC) since December 2020. The SEC has accused Ripple of conducting an unregistered securities offering by selling XRP tokens.

A Recent Timeline of Events

We have previously published a timeline of events from December 2020 to January 2023.

  • March 3: Ripple filed a Supreme Court letter to Judge Torres
  • March 6: Judge Torres issued a 57-page initial ruling in Ripple's legal battle with the SEC, concerning the exclusion of expert testimony from the summary judgment process. This was shared by US defense attorney James K. Filan the following day.
  • March 31: Deaton twitted that, based on the judge's previous cases, it could take up to two months after the Daubert/expert decision before the ruling is issued.
  • April 16: Deaton shared a 2018 video featuring US investor Tim Draper discussing with Gary Gensler (before he was appointed SEC chairman) about banks panicking over the crypto market and potential lawsuits, media pressure, and influence on financial regulators to stop its growth.
  • April 18: SEC Chair Gary Gensler testified for about five hours at a congressional. He declined to say whether Ether is a security or not.

A Final Ruling to Be Expected Over the Next Weeks

Pro-XRP attorney John Deaton, who represents over 76,000 XRP token holders in the lawsuit, said that District Judge Analisa Torres could render a judgment by the end of this month, based on previous patterns in the judge's decisions following the Daubert motions. Deaton has noted that a ruling delivered after May 6 would be inconsistent with Judge Torres's handling of previous cases. "So what I’ve been telling people is that [we’ll get the ruling] somewhere between March 6 and May 6,” Deaton concluded. Assuming this prediction is correct, the crypto community can expect a decision on the case within the next 14 days. Crypto influencer Ben Armstrong, also known as BitBoy, has suggested that a verdict could be delivered in June or July based on his own convictions.

Earlier this month, Deaton emphasized that he does not fault Judge Torres for the delay in her ruling. He recognized that the case is incredibly significant and could have far-reaching implications for global trade and finance. In fact, he stated that this is the most significant no-fraud SEC enforcement action since 1946, underscoring the gravity of the decision that Judge Torres faces.

Think about it. What other decision is as important as this one when it comes to global trade and finance in modern history? This is a historic moment, and Judge Torres is taking her time to ensure that she makes the right decision.

According to Deaton, Judge Torres is likely to declare that XRP is not a security, including in secondary sales. The attorney also cited four past judgments against the SEC's arguments and believes the agency will lose the case. Gary Gensler's inability to confidently label XRP and ETH as securities in a recent hearing has added to the speculation that the SEC will lose.

No Appeal If Ripple Wins?

Attorney Jeremy Hogan, also on Ripple's side, predicted in an interview that the SEC would not appeal if Judge Torres rules in favor of Ripple in the ongoing lawsuit. Hogan explained that there is no benefit to the SEC to appeal any unfavorable ruling, as it risks setting a binding precedent that would hinder its crypto regulation by enforcement tactics. He implied that the SEC could also lose on appeal.

In contrast, Ripple's General Counsel Stuart Alderoty said that the company would appeal to the second circuit in the Appellate Court and even to the Supreme Court if the summary judgment favors the SEC. Ripple's executives are optimistic about a favorable outcome, and the recent surge in the price of XRP reflects this positive sentiment.

SEC Chair Gensler Evades Questions at Congressional Hearing

Last Tuesday's congressional hearing with SEC Chairman Gary Gensler before the House Financial Services Committee was a positive development for Ripple, XRP investors, and the entire crypto industry. During the five-hour long hearing, the Chairman of the House Financial Services Committee, Patrick McHenry, asked Gensler whether he believed Ether was a security, to which Gensler did not give a definitive answer, stating that it depends on the facts and the law.

Lawmakers questioned Gensler on the lack of regulatory clarity for crypto firms, to which Gensler responded that companies should comply and register to protect the investing public. However, Rep. Warren Davidson and McHenry argued that the SEC has not provided the necessary clarity for the industry to comply, citing Gensler's avoidance of the crypto/security question. On the other hand, Congressman Lynch said that there is already a fair amount of guidance and clarity, though it may not be the clarity that the crypto industry desires, and pointed to recent guidance and enforcement actions by the SEC and other regulators.

Unsurprisingly, Gensler has been heavily criticized for his failure to provide clear answers in the case. Davidson even proposed legislation to dismiss Gensler as Chair. If he were to be removed from his position, it could potentially have a positive impact on the crypto market and especially on XRP prices. It could also encourage crypto companies that have left or are considering leaving the US to stay or return, boosting the US market.

XRP Expected to Rise Post-Ruling

On April 13, Ripple introduced its Liquidity Hub, a crypto liquidity platform tailored for business-to-business applications at an enterprise scale. The launch of Ripple's Hub has garnered favorable reactions from crypto enthusiasts who believe that it could lead XRP to greater heights. XRP has been garnering more attention from investors as the number of XRP addresses worldwide has exceeded 4.6 million. Crypto analytics firm Santiment reports that there are presently around 1.08 million active addresses. Ben "BitBoy'' Armstrong shared that he believes that XRP will become one of the best-performing assets after the resolution of the Ripple v SEC case. We'll continue Observing the situation and will report any development on the matter.

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