The highly influential XRP lawsuit is now at a pivotal crossroads. All eyes are on Judge Analisa Torres as the case has entered the settlement phase.
James K. Filan (@FilanLaw), a former federal prosecutor and notable attorney, has provided another update on the lawsuit.
Ripple and the U.S. Securities and Exchange Commission (SEC) have submitted their proposed schedules, laying the groundwork for the crucial settlement phase.
#XRPCommunity #SECGov v. #Ripple #XRP The parties have submitted to Judge Torres a proposed schedule regarding remedies discovery and briefing. pic.twitter.com/7OyVTnTeyc
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) November 9, 2023
The remedies phase encompasses remedies discovery and briefing. This stage will have the negotiations and discussions that will ultimately determine the lawsuit’s future. One particularly intriguing aspect is the delineation of permissible discovery terms, which essentially define the boundaries of exploration for both parties.
The SEC’s Focus on Permissible Discovery
The SEC’s letter to Judge Torres from November 9 holds substantial weight in outlining the scope of permissible discovery. The two parties have already agreed to focus on events preceding the SEC’s initial complaint against Ripple, but there are still some potential sticking points that could derail the settlement process.
One potential issue is the SEC’s request for 90 days to conduct remedies discovery. While Ripple has accepted this request, it remains to be seen whether the SEC can complete its discovery within this timeframe. If the SEC needs additional time, it could prolong the settlement process and increase the costs for both parties.
Another potential issue is the scope of permissible discovery. The SEC has asked for broad discovery powers, but Ripple might challenge some of the SEC’s requests. If the two parties cannot agree on the scope of discovery, it could lead to further delays and litigation.
What Could a Settlement Entail?
A settlement in the XRP lawsuit could offer several benefits to both parties. For Ripple, a settlement would remove the cloud of regulatory uncertainty that has been hanging over XRP for several years.
This would allow Ripple to focus on growing its business and expanding its reach. For the SEC, a settlement would allow the agency to avoid a lengthy and costly trial. It would also send a message to the crypto industry that the SEC is serious about regulating the market.
However, there are also potential drawbacks to a settlement. For Ripple, a settlement could involve paying a significant fine or disgorging some of its XRP holdings. This outcome could damage Ripple’s reputation and financial health.
For the SEC, a settlement could be seen as a sign of weakness and embolden other crypto companies to engage in illegal activity. Ripple CEO Brad Garlinghouse recently discussed the next steps in the lawsuit, and the community is waiting to see where it goes.
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