New Phase in SEC v. Ripple Case Impacts Cryptocurrency Market

Judge Analisa Torres of the U.S. District Court for the Southern District of New York filed paperwork on July 17 referring the case to Magistrate Judge Sarah Netburn, marking the beginning of the next chapter of the United States Securities and Exchange Commission (SEC) v. Ripple proceeding.

The court issued an “amended order of reference to a Magistrate,” transferring judicial supervision of the case to the magistrate’s office, as first reported by journalist Eleanor Terrett.

This phase typically involves discovery and a brief opportunity to raise objections. Settlement is most likely to occur during the general pretrial phase of the proceedings.

On July 13, in a partial victory for Ripple, Judge Torres ruled that Ripple did not violate the law by listing its XRP token on public exchanges.

This has been interpreted to imply that XRP is not a security, which has implications for the entire cryptocurrency market.

Remaining, however, are allegations that XRP was sold as a security when Ripple sold it directly to investors using a marketing strategy that, according to the SEC, could have led investors to view it as a security.

Netburn will supervise this subsequent phase, in which, as some experts predict, the SEC may be tempted to settle the case with Ripple.

Netburn has participated in the case since its inception, including weighing in on several previous motions.

Netburn issued the directive to disclose the much-anticipated “Hinman documents,” a collection of SEC files that included text from a 2018 speech given by then-Director William Hinman, which were widely regarded as a smoking gun.

Even though the publication of the documents may not have had the desired effect in the case, Ripple’s partial victory has had a significant impact on the sentiment surrounding cryptocurrencies as a whole.

In light of Netburn’s history of contesting the SEC’s assertions in the case, there is ample reason to believe the positive sentiment will persist.

XRP is trading at $0.72 at the time of publication, down from last week’s high but up over 56% since July 13.