The SEC and Ripple have asked for an immediate decision in their lawsuit over whether XRP sales violated securities laws

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Last Updated on September 19, 2022 by Bitfinsider

The SEC and Ripple Labs both want a federal judge to rule either that the crypto company associated with the XRP cryptocurrency violated federal securities laws or that the lawsuit be dismissed without requiring a lengthy trial.

Both the SEC and Ripple filed motions for summary judgment in the Southern District of New York, requesting that District Judge Analisa Torres rule on the arguments presented in accompanying documents. On Friday, the documents were uploaded to a federal court database.

In December 2020 (a day before former SEC Chair Jay Clayton stepped down from the role), the SEC sued Ripple Labs, CEO Brad Garlinghouse, and Chairman Chris Larsen on allegations that it raised more than $1.3 billion by selling XRP in unregistered securities transactions. Ripple maintained that XRP sales and trading did not meet the tenets of the Howey Test, a U.S. Supreme Court case that has been used for decades to determine whether something is a security.

Over the last two years, the parties have filed various discovery motions without really addressing the underlying issue – whether Ripple violated securities law by selling XRP. The motions for summary judgment mean that the parties are asking the court to decide whether the SEC or Ripple has provided enough evidence to prove whether there was a violation.

The SEC argued, among other things, that various statements by Ripple executives show that Ripple sold XRP, and XRP investors purchased the cryptocurrency with the expectation that their holdings would increase in value over time.

The SEC stated in its filing that “Ripple publicly touted the various steps it was taking and would take to find a ‘use’ for XRP and to protect the integrity and liquidity of the XRP markets.”

One of Ripple’s arguments was that there was no contract between the company and XRP investors, and that there was no common enterprise, which is one of Howey’s requirements.

According to the company’s filing, many XRP holders who purchased tokens through exchanges would not have known who they were purchasing the tokens from.

“Even if the SEC conducted a post-discovery transaction-by-transaction analysis to identify XRP offers and sales with contracts, its claim would still be barred by law. None of those contracts granted recipients post-sale rights against Ripple or imposed post-sale obligations on Ripple to act in their best interests “According to the filing.

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