The US Securities and Exchange Commission (SEC) and Ripple Labs have both asked a federal judge to issue an immediate ruling on whether Ripple’s XRP sales violated US securities laws.
In separate filings filed Sept. 17 by Ripple and the SEC, both have sought summary judgment in the U.S. District Court of the Southern District of New York.
Summary judgments are presented to the courts when a party involved believes that there is sufficient evidence to reach a decision without the need for a court proceeding.
Both parties have asked Judge Analisa Torres to issue an immediate ruling on whether Ripple’s XRP sales violate US securities laws. Ripple has argued that the SEC has run out of answers to prove that XRP sales constitute an “investment contract,” while the SEC maintains its belief that it is.
Ripple CEO Brad Garlinghouse said in a Twitter post Sept. 17 that the filings made it clear that the SEC “is not interested in applying the law.”
“They want to reframe everything in an improper attempt to extend their jurisdiction well beyond the powers Congress has given them,” he said.
Today’s filings make it clear that the SEC has no interest in enforcing the law. They want to redo everything in an improper attempt to stretch their jurisdiction well beyond the powers granted them by Congress. https://t.co/ooPPle3QjI
— Brad Garlinghouse (@bgarlinghouse) 09/17/2022
Meanwhile, Ripple General Counsel Stuart Alderoty noted that the SEC “is unable to identify an investment treaty” “after two years of litigation” and “cannot pass a single count of the Supreme Court’s Howey Test.” .
In its summary judgment motion, Ripple alleged that the SEC’s case “equates to an improperly perpetual assertion of jurisdiction over the transfer of an asset.”
The filing also argued that since there are no contractual obligations between Ripple and XRP token holders, the SEC cannot demonstrate that XRP token holders cannot expect “reasonable profits” from Ripple’s efforts.
On the other hand, the SEC argued in its own summary judgment motion that there can be an “investment agreement” without a contract, rights granted to the buyer, and no obligations to the issuer.
But Ripple argued in its motion that “that is not law and should not be, because without these essential features there is nothing to which the Howey test can meaningfully be applied.”
Related: The SEC vs. Ripple lawsuit: everything you need to know
Ripple instead pointed to gains from “market forces of supply and demand,” something the SEC “acknowledged” per Ripple’s filing.
The meaning of this admission was highlighted by US Attorney Jeremy Hogan in a September 17 Twitter post: “These admissions are perfect for summary judgment.”
community reaction
The filing of the Ripple and SEC filings resulted in mostly positive sentiment in the XRP community, with one Twitter user believing “the end is near”:
The end is near….You better make sure your bags are packed!!! #XRParmy #xrpthestandard #To the moon https://t.co/9aUEex67V0
— Paul Macrae (@PaulMac_1975) September 18, 2022
The summary judgment request comes nearly two years after the SEC sued Ripple, former CEO Christian Larsen, and current CEO Brad Garlinghouse in December 2020 for allegedly raising $1.3 billion through unregistered securities sales via XRP.
If the court executes the summary judgment, the court’s ruling will have profound implications for determining which cryptocurrencies constitute a security under US securities laws.
The XRP token surged after filing the application to highs not seen since July — it nearly touched $0.40 but has since fallen slightly and currently sits at $0.34, according to CoinGecko.