The Most Important Developments in the Ripple v. SEC Trial: Two Week Recap

TL;DR

• The legal confrontation between Ripple and the SEC intensifies, with recent filings focusing on whether a key witness’s declaration is standard evidence or unsolicited expert testimony.
• As both parties await a judicial ruling, speculations arise about a potential settlement this summer.

The SEC’s Actions

The legal case between Ripple and the US Securities and Exchange Commission (SEC), which dates back to December 2020, has intensified in the past several weeks. One important reason for the numerous actions from both sides is the start of the trial process on April 23.

Shortly after that date, Judge Sarah Netburn entered a new scheduling order focused on the motion for remedies and entry of final judgment. 

On April 29, the regulator abided by the rules by filing its opposition to Ripple’s motion to strike new expert materials. The endeavor was centered on testimony from the key witness, Andrea Fox (known as the “Fox Declaration”).

Ripple previously argued that the declaration represents an unsolicited expert opinion, whereas the SEC described the process as “standard summary evidence in support of calculations for disgorgement.” 

“It’s not an expert report, does not rely on specialized experience, and does not render any opinions at all, let alone an “expert” one. Nor does it present the testimony of a percipient witness. Rather, it applies basic arithmetic to Ripple’s financial records to streamline the presentation of the evidence to Judge Torres… The court should deny Ripple’s motion,” the agency insisted. 

In addition, the Commission claimed that the “Fox Declaration” consists of data derived from documents generated by Ripple itself, including tax returns and financial statements, which can be useful for determining the lawsuit’s outcome.

Ripple Strikes Back

A few days later, the company filed a letter in further support of its initial request. It stated that the watchdog failed to show that the declaration is summary evidence rather than expert testimony:

“Fox is an expert because she purports to use technical or other specialized knowledge to help the trier of fact to understand the evidence or to determine a fact in issue. She does not merely apply basic arithmetic to Ripple’s financial records, as the SEC contends.”

Ripple went further, suggesting that even if Andrea Fox could be categorized as a summary witness, the Commission failed to disclose her before the end of the discovery process.

Other Developments and a Possible Settlement

Earlier this week, the SEC filed its remedies reply brief and supporting exhibits under seal. The redacted and public version of the information was presented a day later. 

According to American lawyer Jeremy Hogan, this action marked the end of the briefs phase. He claimed the regulator “went out with a whimper here,” adding that the legal battle has entered a stage with fewer developments, and both parties must wait for the judge’s ruling.

Hogan previously predicted that the lawsuit may officially be closed this summer following a $100 million settlement. This is far less than the $2 billion penalty sought by the SEC and much more than the $10 million Ripple agreed to pay.

Those willing to dive deeper and learn about the case’s specifics and its potential impact on XRP’s price feel free to take a look at our video below: