The petition of the Ripple company executives to withdraw the US Securities and Exchange Commission (SEC) lawsuit did not find support in court.
Litigation between the crypto company and the department began at the end of 2020, when the SEC filed a lawsuit against Ripple. The agency believes that XRP is not a virtual currency, but a security, and claims that Ripple conducted an unregistered ICO worth $1.3 billion in 2013. Ripple is trying to prove that the SEC itself does not have clear rules that would help companies determine which crypto assets may be considered securities and which may not. In 2021, Ripple co-founder Chris Larsen filed a motion with the court to dismiss the SEC lawsuit.
However, Federal Judge for the Southern District of New York, Analisa Torres, denied the motion, stating that the SEC has every right to prove the defendants guilty. According to the SEC, Ripple CEO Brad Garlinghouse and Larsen were aware of their illegal activities but continued to raise funding through ICOs.
The judge rejected Ripple’s argument that foreign investors residing outside the United States took part in the ICO. As evidence, Larsen presented an email exchange with an investor who wanted to buy XRP with euros. However, this argument did not convince the court. He considered that part of the XRP coins could still be purchased by US residents.
Shortly before the dismissal of the Ripple executives’ motion, legal adviser Jeremy Hogan suggested that this trial would be completed by mid-November. Former SEC Executive Director Joseph Hall said that the outcome of the case will greatly affect the further regulation of cryptocurrencies.
Source: Bits
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