Understanding The Delay In The XRP Lawsuit Verdict: Implications For Crypto Regulations
The ongoing legal dispute between the U.S. Securities and Exchange Commission (SEC) and Ripple, the company behind the XRP cryptocurrency, is experiencing an unforeseen delay, causing uncertainty in the crypto industry regarding regulatory clarity. The case is currently awaiting a pivotal summary judgment.
Marc Fagel, a retired securities attorney, has pointed out that the common belief that a summary judgment in a federal district court takes an average of six months is incorrect. The Ripple lawsuit has already surpassed this timeframe, having been in process for over seven months.
John Deaton, the attorney representing XRP holders in the lawsuit, has argued that if summary motions in Federal District Courts took an average of one to three months, there would be no need for a six-month rule.
Neil Hartner, a senior staff software engineer at Ripple, has drawn attention to the summary verdict in the US SEC Vs LBRY lawsuit. Observers of the LBRY case also believed that the judge was taking an unusually long time to announce the verdict. However, this delay was ultimately seen as a positive sign for the defendant, even though the judge eventually ruled in favor of the US SEC. The court took over four months to file a summary judgment ruling.
The attorney for XRP holders has highlighted significant differences between the XRP and LBRY lawsuits. The Ripple case has ten times the filings of the LBRY case. Additionally, while LBRY’s counsel agreed that the first two prongs of the Howey test were met, the third prong remained a challenge as it is a two-part test.
The XRP lawsuit is particularly significant as it challenges the common enterprise issue. The issue of consumptive intent is still being debated, and it doesn’t even meet the first factor because it’s not an investment.
