SEC v. Ripple: Judge Unleashes the ‘Hinman Papers’ in Favor of Ripple

The legal battle between the United States Securities and Exchange Commission (SEC) and Ripple is entering a new phase as Judge Analisa Torres of the U.S. District Court for the Southern District of New York has referred the case to Magistrate Judge Sarah Netburn. The referral, outlined in an amended order of reference to a Magistrate, signifies a shift in judicial oversight of the case.

With the case now in the hands of Magistrate Judge Netburn, the next step will be the general pretrial phase, which typically involves discovery and the opportunity for objections to be raised. This phase often presents an opportunity for settlement discussions. Legal experts speculate that the SEC is unlikely to appeal the recent rulings by Judge Torres, which included the dismissal of the SEC’s claim that Ripple violated securities laws by listing its XRP token on public exchanges. This dismissal effectively implies that XRP is not a security, carrying significant implications for the broader cryptocurrency market.

However, allegations remain that Ripple sold XRP as a security through direct sales to investors, utilizing marketing tactics that could have led investors to perceive it as such. It is during this critical phase that Magistrate Judge Netburn will oversee the proceedings, with some analysts suggesting that the SEC may be inclined to consider a settlement.

Magistrate Judge Netburn has been involved in the case from the beginning, offering opinions on previous motions. Notably, she ordered the release of the highly anticipated “Hinman documents,” which consist of SEC files containing a transcript of a speech delivered by former SEC Director William Hinman in 2018. These documents were widely viewed as potentially influential evidence. While their impact on the case may not have matched the initial expectations of the cryptocurrency community, Ripple secured a partial victory following their release, significantly affecting overall sentiment in the crypto market.

Given Magistrate Judge Netburn’s history of questioning the SEC’s arguments in this case, there is optimism that the positive sentiment will persist. At the time of writing, XRP is trading at $0.72, experiencing a slight decline from its recent peak but still up more than 56% since the favorable ruling on July 13th.

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