The US Securities and Exchange Commission’s ongoing lawsuit against blockchain firm Ripple Labs and its executives has taken a new twist.
SEC Files Opposition To Motion To Intervene
In a recent release, the agency filed a motion to stop XRP holders from intervening in the ongoing lawsuit. The filing termed the “Memorandum of Law in Opposition of the Motion to Intervene” seeks to ensure no third party is involved in the ongoing case.
The government agency said this is because the movants have no stake whatsoever and cannot be called in as reliable witnesses due to their association with the defendants.
It also noted that their grievances are properly represented by Ripple Labs and the company’s chairman Chris Larsen and CEO Brad Garlinghouse.
The SEC noted that this is not the first occasion the movants have tried infusing themselves into the case, citing their first filing in the Rhodes Island District Court.
It, however, said that the XRP holders might force the agency to take up a legal case against the body of interested movants since there has not been any reason to bring them into the matter.
The SEC said that this intervention is summarily against the agency’s sovereign immunity, and if the courts decide to let them state their case, it may be forced to bring in other disgruntled investors who feel the defendants were not honest in their dealings with them.
The financial agency also explained that the movants’ cause is a lost one given the fact that whatever funds they lost following the lawsuit on secondary markets cannot be recovered as they are not a party to the case.
The SEC said the recent filing by the lead counsel for the movants Jordan Deaton lacked any new substantive argument as they have repeatedly borrowed from the defendants’ narrative of XRP not being a “security.”
It says this sustained discourse is similar to XRP’s position and shouldn’t, therefore, be allowed to stand in order not to foster delay and confusion.
The regulatory body also jabbed at Deaton’s motive, subtly stating that this could be a platform for the lawyer to gain Twitter prominence following the growing media attention surrounding the case.
Ripple Scaling Up Despite SEC Lawsuit
The SEC’s lawsuit in the closing days of 2020 adversely affected Ripple Lab’s partnerships and its utility token’s valuation in the secondary market.
Following the December filing by outgoing Chairman Jay Clayton, crypto exchanges in the US swiftly delisted the XRP token from their platforms. If that weren’t enough, key partnerships with US companies, went underwater with MoneyGram reneging its agreement with the embattled company.
Ripple CEO Garlinghouse had noted that most of the blockchain company’s business was executed overseas, citing the regulatory haze in the American nation as a deterrent to innovative banking in the country.
He also pointed out that only the US SEC has a problem with the XRP token given that Asian nations, the area XRP has the most influence, do not classify the digital token as a “security.”
In the months that followed, XRP dropped from the 4th most valuable crypto position to the bottom ten, and its value traded way below a dollar.
But following preliminary victories in the opening case with the SEC, the XRP has rallied significantly, and calls for the digital payment firm to be relisted on exchanges have begun making the rounds.
And as the general crypto market has rallied, the XRP token has surged after it rose 17% in April and momentarily reclaimed its position as the 4th most valuable cryptocurrency.
The San Francisco-based fintech company has also been strategically repositioning itself since the SEC lawsuit was made public. Ripple said it was launching a private version of its XRP Ledger Protocol tailored for national banks in a release on its website. This private protocol would help apex banks in the issuance, maintenance, and monitoring of central bank digital currencies (CBDCs), set to serve a secondary role to fiat.
The US tech company also recently appointed former US Treasurer Rosa Gumataotao Rios as a board member. Alongside, financial veteran Kristina Campbell will serve as the company’s Chief Financial Officer (CFO).
Rios’ former role as the currency maker is seen as a strategic move to sell the idea of digital currencies to anti-crypto critics. Campbell would be tasked with the responsibility of accelerating the company’s growth while delivering value to shareholders.