Ripple Labs Stands Strong, Refuses to Back Down
By Iaroslava Kramarenko 77 26 May 2023
Kylie Kim, the lead defense attorney for Ripple Labs Inc. in their lawsuit against the SEC, has filed a motion to withdraw from the case. This move has induced a slight panic within the Ripple community and even instigated rumors that the lawsuit could be lost. However, the situation isn't as dire as it seems.
Kim filed her request in the Southern District of New York. It suggests that the lawyer is not exiting the case, but rather severing her employment contract with Kellogg, Hansen, Todd, Figel & Frederick - the law firm representing Ripple Labs. Thus, this action doesn't directly affect the ongoing legal battle between Brad Garlinghouse's team and the U.S. Securities and Exchange Commission.
However, as is often the case within the crypto community, substantial hype has been ignited over nothing. A fervent discussion commenced on Twitter about the underlying reasons for this move and its potential repercussions. Kylie Kim was even accused of not wanting to wait for a court ruling. Yet, there were optimists among those debating who hypothesized that since Kim is leaving, a preliminary decision in Ripple's favor might already have been reached, making her services redundant.
On the other hand, the lawsuit has been protracted to the extent that it mirrors an endless soap opera. It is thus not surprising that the roster of attorneys might undergo changes during this lengthy period.
Let's not forget that on December 22, 2020, Ripple Labs Inc. initially faced allegations of selling securities amounting to $1.3 billion. The prosecuting attorneys assert that the cryptocurrency XRP does not meet the criteria of the Howey test, meaning its transactions should be regulated and taxed like any other financial transactions involving stocks, bills, or bonds.
On May 19, both parties requested Judge Torres to extend the ultimate deadlines for the case review. Now, the final verdict date is officially postponed to June 13, 2023.
Brad Garlinghouse is willing to further delay his victory to ensure it is emphatic and definitive. To facilitate this, he demanded the disclosure of internal SEC emails, which includes a report from one of the Commission's lawyers, Hinman. The emails suggest that there are "reasonable grounds to believe that XRP does not satisfy all the elements of the Howey test, and therefore, does not classify as a security."
It seems that the SEC has already resigned to the inevitable and is therefore ready to show the public all the internal workings behind the creation of the dish named "XRP in its own juice." But Brad Garlinghouse does not appear optimistic and is still expecting some trick from the Commission. In one of his tweets, he wrote: "The SEC wants you to think that it cares about disclosure, transparency and clarity. Don’t believe them. When the truth eventually comes out, the shamefulness of their behavior here will shock you."
But no matter how much longer the hearings last, it does not stop Ripple Labs from developing their project. Over two and a half years, the team has managed to implement many initiatives and establish partnerships with major companies, banks, and government entities. Among the latest achievements of the company are:
- Dominance in trade volume on South Korean crypto exchanges Bithumb, Upbit, and Coinone;
- Purchase of Bitstamp exchange shares previously owned by Pantera Capital;
- Acquisition of Swiss digital asset storage service provider Metaco;
- Announcement of its own Ripple CBDC platform for banks and the government financial sector;
- Membership in the pilot program "e-HKD" and further participation in the development of Hong Kong's CBDC.
It seems that the departure of a single attorney, even a highly skilled one, will not negatively affect the future of XRP.