SEC Granted Deadline Extension in XRP Lawsuit

In a new development in the XRP lawsuit, Judge Analisa Torres granted an extension to the Securities and Exchange Commission (SEC) in its ongoing case against Ripple Labs. The regulator requested additional time to file its remedies-related discovery materials, a crucial step that could potentially bring the high-profile case to a resolution.

As reported last year by TheCoinRise, the SEC announced the dismissal of all accusations directed at Ripple’s CEO, Brad Garlinghouse, and the company’s Executive Chair, Chris Larsen. This was after the American payments firm secured a partial win in court.

The SEC has Until March 22 to Submit Opening Brief

According to court documents filed on March 1, the SEC now has until March 22 to submit its opening brief, a deadline extension approved by Judge Torres. In tandem, the deadline for Ripple’s opposition brief has been prolonged to April 22. The SEC is expected to file a reply by May 6, 2024.

A remedies-related briefing is a comprehensive document outlining potential legal remedies and actions that may be considered or pursued in connection with the litigation at hand.

SEC vs. Ripple

The SEC initiated its case against Ripple Labs in December 2020, alleging that the company, along with CEO Brad Garlinghouse and co-founder Chris Larsen, orchestrated a $1.3 billion unregistered securities offering through the sale of the XRP token. 

The central point of contention revolves around the classification of XRP as a security, subject to stringent regulatory requirements, a stance vehemently contested by Ripple.

‘Howey Test’

The lawsuit has witnessed various legal battles and noteworthy developments, with a pivotal aspect being the application of the “Howey test.” 

This test serves to determine whether a transaction qualifies as an “investment contract” under US law. While the SEC contends that XRP meets the conditions of the Howey test, Ripple vehemently disputes this classification.

Victory in the Near Future?

In a significant turn of events in July 2023, Judge Analisa Torres delivered a partial ruling favoring Ripple Labs. The judge determined that, within the context of programmatic sales on digital asset exchanges, XRP did not qualify as a security. However, she also ruled that XRP was indeed considered a security when sold to institutional investors.

Stuart Alderoty, Ripple Labs Chief Legal Officer, recently predicted that the firm’s ongoing legal battle with the US securities regulator would end in 2024. Further, Brad Garlinghouse, the chief executive officer of Ripple, criticized the SEC for their “regulation by enforcement” strategy, claiming that the agency did nothing but harm small-cap investors.