The SEC versus Ripple case is still going on and they are currently in the settlement phase. We also know that XRP is not a security on the secondary market.
In this particular case, Binance‘s previous case decision which is now case law is also probably going to help Ripple in their $770 million settlement the SEC is asking of them.
The case is about the JD Anderson versus Binance — basically what happened is a group of investors in 2017 bought multiple kinds of crypto assets and these investors went ahead and brought a lawsuit against the crypto exchange in 2022. They alleged that starting in July of 2017, Binance promoted, offered and sold various security tokens in the US without indicating risk and without telling investors that these tokens were securities.
But please keep in mind these investors claimed that they became aware that these tokens were considered securities in April of 2019 with the SEC issued a framework catering tokens as securities — but the SEC did not really do that and gave no guidelines whatsoever.
The judge dismissed the case and said the investors sued too late and they should not have waited over a year after buying these tokens to come up with this lawsuit. The court also said that domestic securities laws matter and they apply because Binance was not a domestic exchange even though it uses servers and computers located in the US.
Binance is an international exchange and there was a time period where they operated in the US but the SEC and other regulatory agencies kicked the exchange out of the country.
Crypto Attorneys Point Out
According to Attorney Jeremy Hogan, he says we really should be thanking Binance for this case because it helps establish precedent — the precedent is that of restriction reach of the US securities laws outside of the US.
Ripple and the SEC recently submitted a proposed schedule for remedies discovery and briefing to Judge Analisa Torres.
And Attorney Hogan says that this will be interesting as nothing less is at stake than the sovereign rights of these foreign countries.
Attorney John Deaton chimes in and says Ripple will not come close to paying the requested $770 million and questions why would the SEC seek disgorgement related to XRP sales in the UK, Japan, Switzerland and other countries.
The SEC does not have a whole lot of grounds to stand on here — you cannot go after companies that are not even operating in the United States of America and this is exactly why Binance’s case versus JD Anderson matters because they were not a US-based exchange and they were operating outside of the US.