The U.S. Securities Exchange Commission landed a minor procedural victory in its lawsuit with crypto payment firm Ripple, as Magistrate Judge Sarah Netburn approved the agency’s request for a time extension in a Text-Only Order, despite Ripple’s opposition.
Judge Rules In SEC’s Favor
The latest update in the XRP lawsuit is bad news for Ripple and XRP holders.
The suit, which the SEC filed against Ripple in December of 2020, alleges that Ripple raised over $1.3 billion by selling XRP in an unregistered securities offering. The blockchain company vehemently denies the regulator’s allegations and wants it wrapped up as quickly as possible.
But with the latest court ruling, the case will likely take a little longer. As pointed out by defense lawyer and former federal prosecutor James K. Filan, the individual defendants in the case, chief executive Brad Garlinghouse and executive chairman Chris Larsen, are now expected to file their Answer by April 8, 2022. The SEC will then inform the court on whether additional discovery is necessary a week later on April 15th, while the joint proposed scheduling order is due April 22, 2022.
However, Filan indicates that these dates can change depending on how fast Ripple files its answers to the complaints of the SEC.
“The filing of the Individual Defendants’ Answer is the triggering event. When the Answer is filed, even if before April 8th, the date the Answer is filed starts the two-week clock running for the filing of the SEC position on discovery and the Joint Proposed Scheduling Order,” Filan explained.
As ZyCrypto covered earlier, the SEC filed the motion on March 21 so as to establish whether any additional discovery is required. The individual defendants objected to the SEC’s extension request, arguing that the securities watchdog has slowed the case down “long enough”.
How Far Can The SEC Delay The XRP Lawsuit?
Notably, the SEC has been accused of using tactics to delay the case and further frustrate Ripple. Some observers claim the agency is intentionally delaying the battle with Ripple because it wants to first get past the case with blockchain publishing firm LBRY, where it’s hoping to get a favorable ruling that it can use as a backstop in the closely-watched legal scuffle with Ripple.
Ripple remains unfazed despite the SEC continually dragging its feet on the case. Ripple CEO Brad Garlinghouse recently said he was upbeat about the outcome of the suit after a federal judge rejected the SEC’s motion to strike Ripple’s key fair notice defense.
Other XRP enthusiasts believe a one-week extension isn’t a big deal. And it means the SEC will not have more excuses as to timelines and more delays after the schedule is confirmed. Moreover, the regulator will have no room to proclaim they were rushed when it boils down to summary judgment.
The XRP price has risen by 1.32% over the past 24 hours to trade at $0.835. It’s currently the sixth-largest cryptocurrency on the market.