Lawyers for the California-based Ripple and the U.S. Securities and Exchange Commission (SEC) saw no prospect of a pre-trial settlement in the case over the sale of unregistered securities.
The plan and timetable for addressing the claims have been filed with the U.S. District Court for the Southern District of New York. Lawyers clarified that negotiations took place under the previous leadership of the SEC. On January 18, the new White House administration nominated Gary Gensler to chair the Commission.
“The parties will promptly inform the court if they reach any substantive decision on the issue,” the lawyers said.
The letter also lays out principles for exchanging testimony ahead of the scheduled hearing.
The SEC said it is seeking to extend the limit to ten witnesses. The agency is interested in notices allegedly directed to Ripple and co-founder Chris Larsen warning that the XRP token could be considered a security.
Ripple representatives cited attorney-client privilege and “inadequate and non-existent legal grounds”. The regulator’s lawyers conceded that they may seek disclosure of the relevant information through the court.
gov.uscourts.nysd.551082.45.0 by ForkLog on Scribd
In late December, SEC filed suit against Ripple, accusing it of selling unregistered securities in the form of XRP. The company’s CEO Brad Garlinghouse said he was ready to engage with the new leadership of the agency to resolve the legal ambiguity.
Preliminary hearings in the case were set for February 22, 2021.
Earlier, a Florida resident filed a class action against Ripple Labs and Garlinghouse. According to the plaintiff, the defendants violated the state’s securities laws and unlawfully enriched themselves.
In January 2021, claims against the California-based company were filed by Tetragon Financial Group, which led the 2019 Series C funding round of $200 million.
Ripple has already been in litigation with a group of investors for the second year, accusing the XRP issuer of violating securities laws.
As noted, Ripple representatives asked the SEC for information on why the regulator does not classify Bitcoin and Ethereum as securities.
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