Ripple faces retrial in California after SEC victory

The legal battle between Ripple Labs and the SEC may have just taken a surprising, perhaps “unforeseen,” turn with a recent California jury. deposit and a court decision reviving the dispute. The California judge alleges that Ripple, through its CEO Brad Garlinghouse, misled investors about XRP, a digital asset developed by Ripple.

The case took an important turn when Judge Phyllis Hamilton of the United States District Court dismissed four of the five claims in the class action against Ripple. These rejected claims were termed “failure to register claims.” However, the complaint regarding Garlinghouse’s alleged misleading statements will go to trial.

Ripple v. SEC lawsuit update from YouTube.

Key details and allegations

Garlinghouse had said he was “very, very long” on XRP, a term used in the trading world to indicate a strong belief that the price of a particular asset would rise. However, the lawsuit alleges that this statement was false because Garlinghouse was simultaneously selling “millions of XRP on various cryptocurrency exchanges” throughout 2017. According to the plaintiff, this constitutes a violation of California securities laws.

The trial will focus on whether Garlinghouse’s statements during the 2017 interview were misleading and whether they violated state securities laws.

Ripple Chief Legal Officer Stu Alderoty said he was pleased with the dismissal of the class action lawsuits, but acknowledged the rest of the claims would go to trial.

You will recall that this comes after their partial victory in a case against the United States Securities and Exchange Commission (SEC), where a US court ruled that the sale of XRP on an exchange did not constitute an investment contract.

Parallel cases and legal opinions

Interestingly, Judge Hamilton’s decision departs from a similar case in the Southern District of New York (SDNY), where Judge Analisa Torres ruled that XRP did not meet all the criteria of the Howey Test when sold directly to retail participants on crypto exchanges.

Judge Torres decision had been seen as a step towards regulatory clarity for the crypto industry. However, Judge Hamilton’s decision in California indicates that the legal landscape remains complex and nuanced.

Judge Hamilton’s decision has stirred up the crypto community because it deviates from the famous earlier decision of Judge Torres. This discrepancy highlights the ongoing debate and uncertainty surrounding the regulatory status of cryptocurrencies.

Analyst Pantoja summarizes next year’s XRP price trajectory in this tweet.

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