Ripple’s legal team recently recorded some victories in the lawsuit, which could force the SEC to settle.
Ripple’s arguments are strong
The positions of the US Securities and Exchange Commission (SEC) appear to be slowly collapsing. When the SEC filed its suit last December, many experts and analysts believed it was the death knell for XRP as the token was removed from many crypto exchanges.
However, the legal team representing Ripple has shown a lot of determination. Since the announcement of the case, the value of XRP has quadrupled again. That’s partly because Ripple has been able to achieve a lot of small procedural victories.
One of those minor victories was over the court order the SEC to recreate its guidelines for cryptocurrencies. This was after Ripple claimed that SEC officials admitted in a meeting that no formal regulatory guidance existed prior to 2019. This while the XRP token has been available to private and institutional investors since 2012. The question is therefore how Ripple could break the law if there were no formal regulations for seven years.
The Howey test
The SEC continues to contradict this, claiming that XRP is an unregistered and thus illegal security. However, there is a test to assess whether it is a security or not. The four points of the test to determine whether it is a security are as follows:
- An investment of money
- In a joint venture
- Profit forecast
- Comes from the efforts of others
The law requires that all four points must be met. Ripple therefore asked Judge Netburn to order the SEC to review thousands of pages of more than 1,500 transaction contracts to try to prove that all four points are somewhere in those contracts. Last week, Judge Netburn granted Ripple’s request. If the SEC declines, the case will be downgraded to an indirect rather than fact-based case.
Coinbase CEO Agrees with Ripple
Interestingly, Coinbase CEO Brian Armstrong has been relatively quiet about the Ripple lawsuit for months, but that all changed this week. He wrote a tweet to his nearly 890,000 followers on Twitter in which he spoke out for the crypto company:
“The Ripple case appears to be going better than expected. Meanwhile, the SEC realizes that attacking crypto is politically unpopular (because it harms consumers). The irony is that the people they supposedly protect are the ones attacking them.”
According to some, Armstrong’s statements are an omen that the XRP token will soon be relisted on the American exchange. Others think that the CEO is now suddenly behind Ripple because Coinbase has also had problems with the SEC in recent months.
Is Coinbase going to re-list the XRP token?
Obviously, this is not how SEC chairman named Gary Gensler expected this case to play out. There is also a rumor that he would like to become the next finance minister. A loss in this lawsuit could therefore become a pain file for Gensler.
Therefore, the likelihood of a settlement appears to be growing. If so, it would pave the way for the re-listing of the XRP token on US crypto exchanges such as Coinbase.
The last point to suggest that the XRP token will be added back soon was a tweet from Coinbase Pro in early September. For a moment, the exchange accidentally added the XRP trading pairs back to the platform. Soon after, the exchange quickly removed them. According to Coinbase, it was a technical glitch, but according to others, it means Coinbase is getting ready to make the XRP token tradable again.