Two prominent lawyers in the crypto space give their opinion 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, the CEO of Ripple, and Chris Larsen, the company’s co-founder.
Palley predicts the San Francisco payment company will lose.
“That is a prediction. I guess 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, petition for dismissal, they will be rejected. You will likely make some discoveries, maybe take a few statements. Presumably they made a testimony at the enforcement … and likely they will countermotions for summary judgment and they will lose.
Unless there is a qualifying argument, or unless you get a personable judge who reads this through and is convinced that it is not a continuing offering of securities. They lose and they will probably 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 being personally liable.
We have to see that. But Ripple is sure to lose in my opinion. And I’m rather curious what the cure will be in the end. ”
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 without the need for it is for Ripple’s commitment.
A pre-trial hearing is scheduled for February 22nd.
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