Ripple’s best path forward does not involve a lengthy courtroom battle with the U.S. Securities and Exchange Commission (SEC), according to a prominent crypto lawyer.
Stephen Palley, a blockchain and digital currency lawyer at Anderson Kill, says the notion that the San Francisco payments firm could succeed in court and create a new legal test for digital assets is delusional.
“For XRP to survive, Ripple needs to cut a deal with the SEC and not persist in the risible delusion of ultimate success in the US Supreme Court and substitute the Ripple Test for the Howey Test. There are 600 million reasons why I am right.
If they care about bag holders, that’s the path.”
Palley is also weighing in on Ripple’s second lawsuit, which was filed in the Delaware Chancery Court this week.
Tetragon Financial Group Ltd. filed a complaint against the company seeking to “enforce its contractual right to require Ripple to redeem” Series C preferred stock that the investment company holds. Ripple says the new lawsuit has “no merit.”
Palley says the second suit is “another bit of very unwelcome news for Ripple” that shows the company was aware that XRP could be a security.
“The problem Ripple is going to run into – and why I think they are basically screwed – is discovery, including contemporaneous documents and depositions.
There’s no universe in which this will help them at all.”
Featured Image: Shutterstock/Martin Capek