The ongoing legal tussle between the US Securities and Exchange Commission (SEC) and Ripple Labs, Inc. has had investors on the edge of their seats as it influences the performance of XRP, the cryptocurrency linked to the company’s distributed ledger.
Legal Clash Between SEC And Ripple Impacts XRP Performance
The virtual token regained some ground on Monday, 29 April 2024, after a loss of 1.51% on the previous day. Ripple filed a motion to strike the testimony of SEC accountant Andrea Fox. The regulator opposed this motion and categorised Fox as a summary witness. The objection read:
Ripple incorrectly claims this declaration constitutes undisclosed expert testimony. It does not. It is standard summary evidence permissible under Fed. R. Evid.1006 in support of calculations for disgorgement. It is not an expert’s report, does not rely on specialized experience, and does not render any opinions at all, let alone an ‘expert’ one. Nor does it present the testimony of a percipient witness. Rather, it applies basic arithmetic to Ripple’s financial records to streamline the presentation of the evidence to Judge Torres.
The fintech firm stated that it realised that Fox was a summary witness and therefore argued against the presentation of new evidence as the SEC must divulge witness identities, testimonies, and evidence. Ripple has until Thursday, 2 May 2024 to file a counter against the SEC’s opposition filing, and then the SEC will have until 6 May 2024 to register a rebuttal.
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In December 2020, the SEC accused Ripple and two of its executives of raising $1.3bn through an unregistered and ongoing digital securities offering. Should the SEC succeed with a punitive disgorgement and injunction banning Ripple from selling XRP to US investors, the cryptocurrency may face a rocky road.
