James K. Filan, the defense counsel for Ripple, has made public a move for summary judgment filed by the accused business and its officials. The SEC, according to Ripple Labs, cannot demonstrate that XRP transactions are an investment contract. If Ripple Labs prevails, the case may serve as a model for future disputes over whether the cryptocurrency qualifies as a security.
The Securities and Exchange Commission (SEC) and Ripple Labs' landmark legal battle may be coming to an end.
A lawsuit that has piqued the curiosity of the cryptocurrency sector for almost two years might soon come to an end.
James K. Filan, the defense lawyer for Ripple, tweeted on Sunday, September 18, 2022, informing followers that Ripple Labs, current CEO Brad Garlinghouse, and former CEO Christian Larsen had submitted an early move for summary judgment. When the parties making the motion can show that there are no real factual disagreements, a summary judgment may be granted.
One of the main points of contention made by the defendants is that because the transactions involving XRP, the native currency of Ripple Lab, took place on foreign exchanges like Binance, Bitfinex, Bitforex, Bithumb, Bitlish, BitMart, Bitruem, and Huobi, among others, the SEC lacks jurisdiction over them.
The SEC filed a lawsuit against Ripple Labs, its current CEO Brad Garlinghouse, and its former CEO Christian Larsen for allegedly raising $1.3 billion through unregistered securities sales and the latter for allegedly personally profiting by hundreds of thousands of dollars. In Dec. 2020, the case was initiated.
Ripple claims it's not an investment contract.
According to the defendants, the SEC cannot demonstrate that the transfer of XRP entails a "investment contract," a necessary element for an asset to meet the requirements of the Howey Test and be classified as a security.
A "contract for investment" cannot exist, according to the defendants, unless the investor obtains a legal right to demand and receive a portion of the profits produced by the promoter's activity.
The defendants' move to request summary judgment stems from the SEC's failure to establish the existence of an investment contract without these components.
Earlier in the lawsuit, the business and Larsen and Garlinghouse attempted to utilize a remark made by senior official William Hinman in 2018 to buttress the defense that Ripple was not a security. Hinman said in the statement that he didn't think Ethereum, the second-largest cryptocurrency in the world by market cap, was a security.
