I'm not into courtroom dramas. Law & Order and Suits aren't my cup of tea and I only watch Daredevil for the superhero fun. But I can't look away from the slow-burning production called Securities and Exchange Commission (SEC) v. Ripple Labs, Inc., also known as case number 20-CV-10832 in the Southern District of New York.
In this thrilling tale, District Judge Analisa Torres holds the power to steer the cryptocurrency market into a new era. While the legal complaint only concerns Ripple (XRP -2.00%) and its operating structure, the precedents set here should have ripple effects (pun intended) on other cryptocurrencies, too.
So Ripple owners and other crypto investors are keeping a close eye on SEC v. Ripple Labs. But this saga has been going on for three years now. When will it end -- and how?
Image source: Getty Images.
The scheduling story so far
In a court filing dated November 13, 2023, Judge Torres nailed down the schedule for further pretrial filings. The process of discovery and rebuttals regarding the remedies the SEC will seek in the remaining legal action must be completed by April 29, 2024. To be clear, the Court has already dismissed most of the complaint with prejudice, which prevents the SEC from appealing the decision. What remains is the charge that selling Ripple tokens to sophisticated, institutional investors during the token's original launch may have required registration with the SEC. Other charges, involving ordinary investors having access to the Ripple token, have been swept under the proverbial rug.
That deadline overlaps the originally scheduled trial date, which had originally been set to April 23, 2024. A jury trial is still happening, supported by the pretrial discovery efforts highlighted above. However, the opening of that process has been adjourned "sine die," which is Latin for "without a date" and leaves the actual trial date unsettled for now.
I'm no lawyer, but delays like this appear to be fairly common in complicated court cases. In an interesting departure from the standard legal definition, the New York State court system defines "sine die" as a legal process which commands a witness to appear and testify, in addition to its more commonly known meaning of an adjournment without a set date. This definition, as found on the official New York courts website, adds a unique perspective to the adjournment of the Ripple trial. It seems to imply that the scheduling may be significantly influenced by the logistics of witness testimony, indicating that the availability and organization of witnesses could be a key factor in determining when the trial will proceed. This interpretation sheds light on the potential complexities involved in the trial's scheduling and underscores the importance of witness contributions in this high-profile case.
Mark this date (no, not that one) on your calendar
So the Ripple case is still unsettled in some ways. Judge Torres has not rescheduled the institutional trading trial to a firm date, and it could take a while to finalize the arrangements for a complicated trial of public interest. It's best to wait for the final scheduling order, but the jury selection might start next summer.
And it's anybody's guess how long the actual trial may be. Again, Judge Torres will provide a clear schedule someday. The trial has already been delayed once and it could happen again -- the wheels of the legal machine can grind in unpredictable ways. Still, the current situation points to a full trial finally taking place in second half of 2024.
Again, I don't even watch legal dramas and my educated guesses should be taken with a grain of sea salt. I did my best to dig up the relevant court filings and make sense of them for you.
What Ripple investors are waiting for
The crypto market is holding its collective breath, waiting for a firm legal and regulatory framework. Bitcoin has been around since 2009, Ripple's allegedly tainted blockchain launch came just three years later, and here we are in 2024 without clear guidelines for how these digital currencies should be treated on the open market.
Judge Torres' order from July suggests that tokens like Ripple are more like newfangled currencies than financial securities. That proposition will surely be fine-tuned in appeals, Supreme Court interpretations, and other precedent-setting court cases before the matter is settled. Other token types could fall under different rules, too. Until then, at least some cryptocurrencies appear to be outside the SEC's regulatory scope and more properly managed by other agencies -- or perhaps by state-level lawmakers.
When this murky picture clears up, the mere existence of a proper rulebook should be good news for the crypto market as a whole. Even a heavy-handed approach with strict registration requirements and costly taxes would be better than the nearly total lack of guidance you see today.
Until then, crypto investors can only hope that the SEC v. Ripple Labs trial reaches an actual jury bench in 2024, helping lawmakers finalize their permanent regulations. Ripple is running a successful international payments system as this drama plays out, though the largest market was deactivated for two and a half years.
The final Perry Mason moment is coming, and I can't wait to see how it plays out.
