Sunday, June 4, 2023

XRP vs. SEC: Parties Reeling as Judge Bars Expert Witness Testimony


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  • Judge Torres has handed down a ruling on the expert testimony dispute. 
  • Under Section 5, offering or selling a security is unlawful unless a registration statement is in effect.
  • Ripple and its executives concede that they violated Section 5.

The admissibility of expert testimony has been a contentious issue in the high-profile court case between Ripple and the SEC, and now a judge has weighed in with a decision. 

Judge Torres has ruled on the parties’ motions to preclude expert witness testimony, barring some or all of the testimony from being presented in court. The decision has sparked debate among legal experts and could impact the outcome of the case.

It is important to note that the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, the payments technology company that holds a large percentage of XRP, a digital asset transacted on the cryptographic XRP Ledger. 

The SEC alleges that Ripple CEO Brad Garlinghouse and co-founder Chris Larsen violated Section 5 by making unregistered offers and sales of XRP. Under Section 5, offering or selling a security is unlawful unless a registration statement is in effect or has been filed with the SEC. The lawsuit will likely have significant implications for digital assets’ future and blockchain-enabled networks’ regulation.

The SEC’s lawsuit against Ripple, Garlinghouse, and Larsen continues to unfold. The defendants have admitted to offering and selling XRP through interstate commerce without filing a SEC registration statement. 

According to court documents, Ripple and its executives concede that they violated Section 5 by failing to register XRP as a security before selling it to investors. The admission of guilt could have significant consequences for the defendants, who face hefty fines and other penalties if found liable. 

The case has drawn attention from the wider blockchain community, with many speculating on the future of digital assets in the face of increasing regulatory scrutiny.

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