Ripple-SEC Litigation One Step Closer to the Finish Line

Today has been a remarkable day for crypto enthusiasts following the legal battle between Ripple and the US Securities and Exchange Commission (SEC). The court case has moved one step closer to the finish line. Please note that the trial is under summary procedure.

The SEC has filed a comprehensive petition with the court asking for the testimony of ten Ripple experts to be excluded. XRP, in turn, filed a petition to exclude one expert from the US Securities and Exchange Commission.

According to SEC representatives, the opinions of experts from Ripple should not be taken seriously for the reason that they do not follow the three rules of the Howie test.

The Howey test is a term that was introduced in one of these courts involving the US Securities and Exchange Commission. This term has a set of rules according to which a cryptocurrency token can receive one of two statuses, which will show the attitude of the SEC towards it.

According to some rules, in the end, the coin receives either the status of a utility token - a coin that does not correspond to the concept of "security" or a security token - a coin that corresponds to the concept of "security". In the first case, only those Americans whose annual income exceeds $200,000 in the last 2 years ($300,000 if married) can invest in an asset. In the second case, anyone can invest in an asset.

The US Securities and Exchange Commission comments on its request:

The Defendants and their experts ignore Howey and the test case and instead ask the court to decide whether the Defendants offered and sold XRP under investment contracts by referring to other legal regimes or to facts that the courts have repeatedly found irrelevant to Howey's analysis..

According to Ripple, one of the SEC experts does not have the necessary experience to take into account his opinion. According to XRP, the expert's opinion was simply copied from the Ripple blog:

His testimony is irrelevant to the issues before the court. It will simply confuse and distract the jury by asking them to reach a verdict on the wrong basis on whether the defendants' distributions of XRP should be considered investment contracts in accordance with policy, rather than investment contracts in fact and law.

In response, the US Securities and Exchange Commission criticized this opinion about the SEC expert.

Let's wait and see what the court will say about these petitions. Recall that in December 2020, the SEC sued Ripple, accusing the latter of conducting an initial offering without prior registration with all the necessary procedures. Until March 31, US Judge Analisa Torres is due to deliver a final verdict.