Two prominent crypto attorneys offer their opinions on the likely outcome of the US Securities and Exchange Commission lawsuit against Ripple.
Stephen Palley, a blockchain and digital currency attorney at Anderson Kill, and Gabriel Shapiro, a decentralized technology attorney at BSV Law, discussed the lawsuit on the Unchained podcast.
The SEC claims that Ripple illegally sold XRP as an unregistered security when it was launched, and claims that the digital asset is a security to this day. The SEC also filed lawsuits against Brad Garlinghouse, CEO of Ripple, and Chris Larsen, the company’s co-founder.
Palley predicts the San Francisco payment company will lose.
“This is a prediction. I think I could be wrong, I have to cover myself because I’m a lawyer. Ripple will lose. Garlinghouse and Larsen will lose. They will fool around, apply for dismissal, they will be denied. You will likely make some discoveries, maybe you will make some statements. Presumably they made testimony in the enforcement action … and they will likely countermotions for a summary judgment and they will lose.
Unless there is a qualifying argument or they get a personable judge who reads this through and is convinced that this was not a pending security offering. They lose and they likely settle. ”
Shapiro broadly agrees with Palley, although he is less sure about the outcome for Garlinghouse and Larsen.
“I think Ripple will lose. I would say I’m less sure that the founders will end up personally liable.
We have to see that. But surely Ripple will lose in my mind. And I’m rather curious what the remedy will be. ”
According to a recent report citing sources familiar with Ripple’s strategy, the company will argue that its payment products do not depend on the digital asset, that news about Ripple did not affect the price of XRP, and that the cryptocurrency is completely liquid with no need for Ripple’s stake.
A pre-trial hearing on the lawsuit is scheduled for February 22nd.
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