Embattled payments company Ripple is unlikely to settle before the conclusion of the trial in its high profile case brought by the U.S. Securities and Exchange Commission (SEC).
The regulator, responsible for overseeing the issuing of securities and financial markets, is currently in the discovery phase with its case against Ripple, after alleging the firm had issued its XRP tokens as an unregistered security.
In a letter to the judge in the case, the parties said they “do not believe there is a prospect for settlement at this time,” pointing to a change in key personnel with the incoming Biden administration among other reasons.
As a result, it is now expected the matter will run to a full trial, which will seek to establish whether Ripple’s offer was in fact a legal security.
The case was initiated by the regulator back in December, with the SEC concerned Ripple had issued over $1 billion in XRP tokens to retail investors, without securing the necessary approval. As a security, this would be in breach of securities laws, according to the regulator.
A pretrial conference is scheduled for February 22, which will bring together both parties in front of the judge to discuss the salient points of the case. The discovery period of the trial is set to run until August 16, with a hearing to follow.
The case has set Ripple in bitter disagreement with the SEC over its ICO and the subsequent sale of its XRP token. While Ripple maintains the tokens are not securities, the SEC suggests it has all the hallmarks of a pseudo-security, and therefore must be subject to the same legal standards as other securities issues.
The case could ultimately set a precedent for other high profile ICOs, which raised money from retail investors through general sale of digital tokens.
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