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Ripple trial hearings start this month

Photo of: Joseph Stone
by Joseph Stone

A first hearing in the trial between Ripple (XRP) and the SEC will take place in February. If the two sides discuss a settlement, however, it is unlikely that they will reach an agreement by then.

December 2020 was marked by a painful episode for Ripple. The American stock exchange regulator accused him of issuing financial securities. The SEC considers XRP to be a security and not a cryptocurrency.

The prospect for the company is therefore a trial, the first hearing of which will take place at the end of the month. Ripple is not desperate, however, to get the American authorities to change their position.

Changes in the leadership of the SEC might suggest this. However, such a scenario seems unlikely in the near future. In a legal document submitted to the courts, both parties state that they are holding discussions.

Nevertheless, Ripple and the SEC “do not believe there is any prospect of a settlement at this time,” they write to Judge Analisa Torres. However, the parties also note that these discussions were being held with the SEC’s previous management team.

A compromise is therefore not yet out of the question. However, the regulator seems for the time being to continue on the same trajectory. As CoinDesk reports, the U.S. authority is seeking five additional depositions from the courts.

In principle, the limit is set at 10. The SEC blames the co-founders of Ripple for ignoring its warnings. It states that two legal memos warned against classifying the XRP as an “investment contract”.

The company categorically refutes such a qualifier. In fact, Ripple recently went on the offensive, believing that his token is akin to the Ether. To demonstrate this, the firm requires all the elements that allowed the SEC to establish that ETH was not a security.

“The SEC clearly picked two winners and ignored a growing and robust industry that is much more significant than Bitcoin and Ether,” the firm said. The firm wants to know why the two assets are worthy of the authority’s endorsement.

A first pre-trial hearing will be held on February 22. This will be followed by a first phase of “discovery”, to be completed by August 16. These months could be used by the parties to reach an agreement.