The potential ruling on the ongoing Ripple class action lawsuit about XRP is important but will do next to nothing for the asset’s proper classification. Regardless of this, the XRP community – and maybe the crypto world at large – is still waiting patiently for an official end to the legal proceedings.
Ripple Class-Action Lawsuit
In 2018, a few XRP investors filed a lawsuit against Ripple. The litigants claimed that Ripple issued and sold XRP to them, even though it knew the asset is an unregistered security. At the moment, there is one “joint” class-action lawsuit which includes filings from three different plaintiffs. Ryan Coffey, who initiated the first filing, abandoned it.
A few months later in December, Ripple filed a motion to dismiss, attacking the timing of the lawsuit. Ripple’s motion also asserts that the XRP owned by the litigants were not purchased directly from Ripple.
Yesterday, Coinspeaker reported that Chief District Judge Phyllis Hamilton of the Northern District of California had taken the motion under submission. However, there is no timeline to suggest when a resolution of the case will be achieved.
Ripple Lawsuit Win Will Not Determine XRP Fate
If Ripple succeeds in its motion to dismiss, it would be a big win for the company. A win would mean that Ripple can put the case to rest – for now. The celebration could, however, be somewhat temporary because the lawsuit would really not determine XRP’s classification.
Ripple’s motion for dismissal does not shed any light on the proper categorization of XRP. The argument on dismissal is based on a few technicalities that will not get the community any closer to answering the big question.
Compound General Counsel Jake Chervinsky best explains the trickiness of the dismissal, even if Ripple is successful:
“Even if Ripple wins its motion to dismiss & has the whole class action thrown out, it won’t mean much for XRP. The big & interesting question is if XRP was (or is) a security. Ripple’s motion didn’t ask that question, so dismissal won’t answer it – just defer it to another day.
Will Ripple Be Off the Hook If It Wins?
The simple answer is – probably not. A successful dismissal means that Ripple might not have to grapple with this anymore, with any other parties. However, the United States Securities and Exchange Commission (SEC), could very easily bring a case forward, throwing Ripple back a few steps.
Even though the SEC has not made an official move, it could very well file a new case at the District Court for the Southern District of New York. The SEC is known for its doggedness and if this happens, Ripple will be thrown down the rabbit hole.
Ripple CEO Brad Garlinghouse is mostly unfazed. Recently, Garlinghouse has noted that “it’s very clear that XRP is not a security.” Laying out arguments to buttress his points, the CEO adds that he is confident that XRP will not be seen as a security and so he is “not too worried about it.”
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.