XRP Lawsuit: A Huge Win Secured!

RIpple Labs just won a big procedural win in the XRP (CRYPTO:XRP) lawsuit. Is a settlement incoming soon?

| More on:
Person Hands Opening Mailbox To Remove Newspaper

Image source: Getty Images

Ripple Labs won a major victory in the XRP (CRYPTO:XRP) pre-trial hearings last week. The judge ruled for a second time that Ripple could use written statements by an SEC official that damage the SEC’s own case. With this evidence permitted in trial, Ripple has increased its chances of winning. That, in turn, increases the chances of a settlement on favourable terms for XRP’s developers.

Judge denies DPP motion

Last week, Judge Sarah Netburn ruled against the SEC, saying that she would not reconsider her prior ruling on the Hinman statements. Prior to the filing of the lawsuit, SEC official William Hinman publicly said that cryptocurrencies were not securities. The use of his words in court was a major battle in the pre-trial hearings; Ripple Labs wanted to use it, and the SEC wanted Ripple to be banned from using it.

Last week, Netburn decided that Ripple Labs could use the statement for a second time. So, now, Ripple can use evidence that will be extremely favourable to the claim it’s trying to make: that XRP is not a security. That significantly increases the chances of Ripple winning should the matter go to trial.

Settlement coming?

Now that Ripple can use William Hinman’s statements in court, its chances of victory have improved. In a trial, the more evidence you can bring that favours your side, the better. Ripple is permitted to use a statement by an SEC official contradicting the SEC’s entire case. That’s extremely damaging to the plaintiffs.

For this reason, we might expect a settlement in the SEC vs. Ripple Labs lawsuit pretty soon. It just isn’t looking likely that the SEC will win if this thing goes to trial. Potentially, they may seek to settle to extract a minor concession from Ripple Labs. Legal experts following the XRP lawsuit have speculated that a settlement could come as soon as April. We still have about two weeks left in the month, so it’s entirely possible that that could happen. If a settlement were reached, it would likely be for a small amount, since Ripple has said that it totally rejects the SEC’s claims and wants the agency to pay its legal bills.

What this means for XRP holders

If Ripple prevails in the XRP lawsuit, that will be a boon to XRP holders. It may not lift the token’s value overnight (last week’s procedural win certainly didn’t), but it will improve the XRP ecosystem as a whole. Ripple Labs is involved in developing XRP, not only as a currency, but also as a payment service. It spends significant sums of money every year on projects such as these:

  • Funding independent blockchain developers
  • Building RippleNet
  • Recruiting banks to use RippleNet for cross-border money transfers
  • And more

All of these tasks take time and money. For example, the recent funding round for XRP developers cost nearly $1 billion. If Ripple wins the lawsuit, it will not have to pay out $1.3 billion and will therefore be able to continue working on projects like the ones just mentioned. That will probably be bullish for XRP.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

Nickel ore is mined from the ground.
Investing

Cameco vs. Barrick Gold: 2 Undervalued Mining Stocks Set to Unearth Gains

Cameco (TSX:CCO) and Barrick Gold (TSX:ABX) are top mining stocks that look to be on sale right here!

Read more »

stock research, analyze data
Investing

Could Dollarama Stock Reach $150?

After gaining over 44% in the last 12 months, can Dollarama stock keep up this exceptional growth rate and climb…

Read more »

TIMER SAYING TIME FOR ACTION
Tech Stocks

3 Reasons to Buy Shopify Stock Like There’s No Tomorrow 

Shopify stock fell 25% after reporting disappointing guidance. Should investors buy the dip and hold the stock for the long…

Read more »

grow dividends
Dividend Stocks

3 Canadian Stocks With a Real Chance of Doubling Your TFSA’s Value

Three outperforming Canadian stocks can help TFSA investors double their account balances.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

3 No-Brainer Stocks I’d Buy Right Now Without Hesitation

At any given time, the market may have certain stocks that offer a powerful combination of reliability, potential, valuation, etc.,…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

3 Canadian Growth Stocks I’d Buy Under $30

These under $30 Canadian growth stocks are well-positioned to capitalize on mega trends such as e-commerce, the electrification of vehicles,…

Read more »

Gas pipelines
Stocks for Beginners

3 Reasons to Buy Enbridge Stock Like There’s No Tomorrow

Enbridge (TSX:ENB) is a superb long-term option. Here's why you should buy Enbridge stock right now and hold it for…

Read more »

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »