A federal judge in the U.S. District Court of the Southern District of New York has approved a former investment banker and venture capitalist as the “Declarant” in the SEC’s lawsuit against Ripple Labs. The individual, whose name is being withheld to protect their privacy, has provided a statement auditing the case and offering a number of conclusions and options for Ripple, the SEC and XRP holders.
The individual, who has expertise in cryptocurrency and finance, declared that Ripple Labs and their associated individuals are in the wrong for selling unregistered XRP to the public. They also pointed out that the SEC’s case against Ripple is weakened by the lack of evidence showing Ripple directly soliciting investors’ funds for Initial Coin Offerings, rather than just selling XRP.
The Declarant then offered a number of options and recommendations, such as Ripple entering into a settlement with the SEC to allow for continued sales of XRP while becoming compliant with U.S. regulations, or offering an escrow agreement that would keep XRP holders safe from potential price declines due to the lawsuit.
The individual concluded that regardless of the outcome, Ripple, XRP holders, and the SEC can all benefit from a settlement that would allow Ripple to remain in business, pay a penalty, and agree to certain conditions for future sales of XRP.
This decision marks a major development in the ripple vs. SEC case, as it is the first time an independent third-party expert has been approved by the Court to offer expert advice and conclusions. It is expected that the court will take the Declarant’s advice into consideration, and that their opinion could have a major impact on the future of Ripple and XRP.