In Brief:
- Judge rejects XRP holders’ plea to join the case against Ripple as defendants
- The ongoing battle between Ripple and SEC took a turn when the court warned about enforcement action should they be allowed as defendants
A New York federal judge ruled that XRP holders’ can not intervene in a lawsuit against the company. XRP is the digital asset of the involved company named Ripple Labs Inc.
The legal battle between the American technology firm Ripple and the U.S. Securities and Exchange Commission (SEC) was further complicated when the judge declined the XRP token holders’ plea to join as defendants.
Additionally, the judge ruled that the SEC has to launch enforcement actions against XRP holders if they are allowed to take part as defendants.
The U.S. District Judge Analisa Torres stated that XRP purchasers could file “friend of the court” briefs, insisting on finding that XRP does not breach security laws. Instead, the court suggested ‘amicus curiae’ – to strike a proper balance, which would allow movants to share their meaningful insights or information with the court within the control of the litigation.
Permitting the XRP holders to intervene would delay the case for which Ripple and token holders seek a quick resolution, warned Judge Torres.
John Deaton told Law360 on Monday that his clients “understand and respect Judge Torres’ ruling,” and that they knew that intervening at all would be an “unusual and extraordinary request” because “in essence, we were asking the judge to order the SEC to formally sue us.”
He further added “I stand by the request because it signaled to the judge the impact the SEC’s overboard claims are having on XRP holders with no connection to Ripple”.
The legal conflict between the involved parties does not seem to end soon. The SEC opposed the ruling, while Ripple favored that XRP holders had an interest in the litigation and agreed to only participate as amicus curiae.
