XRP holders got a setback this week even as Ripple and the US Securities and Exchange Commission (SEC) battle out an alleged securities case. Some holders had earlier blamed the lawsuit caused them financial losses, but courts have dismissed the plea.
As per a court filing on Tuesday, US District Judge Analisa Torres denied the motion put forth by XRP holders that requested the representation of themselves as third-party defendants in the ongoing Rippe v SEC case.
She said the XRP holders did not file a pre-motion letter, a legal document that explains the rationale behind the intended application. However, the holders have not been denied to file the pre-motion letter and refile the motion.
“It was denied “without prejudice” with the ability to refile in accordance with Judge Torres’ local rules. This simply means it must be refiled as a letter motion. I’m on it, please don’t get discouraged,” said John Deaton, an XRP investor and founder of legal forum Crypto Law, in a tweet.
What Did I say about being knocked down and how we respond?
It was denied “without prejudice” with the ability to refile in accordance with Judge Torres’ local rules. This simply means it must be refiled as a letter motion. I’m on it, please don’t get discouraged. https://t.co/R54YTBn5SW
— John E Deaton (@JohnEDeaton1) March 16, 2021
Deaton’s the initiator of the lawsuit that represents the investor group. He had filed the motion on March 14 for protecting the substantial interests of XRP investors. Some points explaining the rationale behind intervening were:
- [Ripple holders] will be greatly impacted by the disposition of this action.
- XRP Holders have an interest relating to the property that is the subject of the action – XRP.
- XRP Holders are so situated that disposing of the action may as a practical matter impair or impede their ability to protect their interests.
- The existing parties do not adequately represent the interests of XRP Holders.
It added that the intervention will not unduly delay the legal proceedings of the original and that the ‘XRP Holders’ group would significantly contribute to the underlying factual issues in the case.
XRP, Ripple, and the SEC
The Holders are the one significant stakeholder of the Ripple v SEC whose interests have not been catered to at all in the lawsuit.
For the uninitiated, the US SEC slammed the payments processor in December 2020 on charges of holding an unlicensed securities sale (in the form of XRP) and its founding team—Brad Garlinghouse and Chris Larsen—making personal profits to the tune of hundreds of millions of dollars.
Garlinghouse has since denied the claims and stated the charges were uncalled for in a tweet thread in January.
Q: Why didn’t Ripple settle with the SEC?
Can’t get into specifics, but know we tried – and will continue to try w/ the new administration – to resolve this in a way so the XRP community can continue innovating, consumers are protected and orderly markets are preserved. 2/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
Ripple has so far not made any public announcements regarding their legal proceedings (save few statements like stating their Asian business was unaffected), but high-profile partners like Moneygram have since backed out of being associated with the firm.
Get an edge on the cryptoasset market
Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.
Like what you see? Subscribe for updates.