Ripple hits major blow in SEC lawsuit

Ripple Labs has won a major victory in battle with the US Securities and Exchange Commission (SEC). On September 29, the judge ruled that the document written by SEC Representative William Hinman must be released. This document includes a speech in which Hinman says that Ethereum is not an effect.

What does this mean for Ripple Labs?

Ripple Labs sees Hinman’s speech as a key piece in the SEC lawsuit. If Ethereum is not a security, then XRP is not, according to Ripple Labs. Incidentally, a security is a financial instrument to which a certain profit expectation is attached. Usually, parties that issue a security also enter into obligations towards the investors, which are laid down in a so-called investment contract.

In the case of the XRP token, there has never been such a contract. It is now up to the judge to determine whether Hinman’s words about Ethereum also apply to Ripple Labs’ XRP token. If XRP qualifies as a security, this can cause major problems for the price of the token. Exchanges such as Coinbase, Binance and Kraken do not have the required papers to be allowed to trade securities.

Ripple Labs on the winning side

Things didn’t go well for Ripple Labs at first, as it looked as though the SEC would easily turn things around in a win. That would mean the end of the XRP token on the major exchanges and probably completely destroy the price. Now suddenly there is hope and good news is coming out about the case again and again.

It’s starting to look like the SEC has few strong arguments left and that Ripple Labs may emerge victorious. That would be a hugely important blow to the project. It won’t be long, because on September 17, a so-called “summary judgment” was filed by the SEC, which often concerns the end of a case.

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