The SEC dropped its lawsuit against Ripple executives, and the most complete timeline of the confrontation between the two sides was compiled
Original source: DLNews
Original compilation: BitpushNews Yanan, Mary Liu
Ripple’s dispute with the U.S. Securities and Exchange Commission (SEC) is far from over, and the case is seen as one of the benchmarks for disputes over the definition of securities between the crypto industry and the SEC. As Congress still lacks encryption regulatory laws, these cases will provide an important reference for the US government to formulate digital asset regulations.
Previously, Ripple CEO Brad Garlinghouse said the company had paid more than $200 million in legal fees. At the same time, Ripple said that nearly 90% of its business is currently conducted outside the United States.
When District Judge Analisa Torres ruled in part in Ripples favor in July, some cryptocurrency experts viewed it as a clear victory for Ripple.
The price of XRP, the token used by Ripple for transactions on its network, surged as a result of the ruling.
However, under the leadership of Director Gary Gensler, the SEC did not let Ripple go. Since crypto exchange FTX went bankrupt last year, the agency has launched a flurry of enforcement actions across the crypto industry, including lawsuits against crypto exchanges Binance and Coinbase.
Last week, a judge denied the SEC’s request to appeal part of Ripple’s ruling. Although this result is somewhat disappointing to the SEC, more unresolved aspects of this case will be unfolded in the trial in 2024.
In order to facilitate your in-depth understanding of the entire incident and its future direction, we have sorted out the following timeline for your reference.
year 2004
Ripple’s origins date back to 2004. At the time, Canadian programmer Ryan Fugger launched a peer-to-peer payment system called RipplePay. The system existed before the rise of blockchain technology and did not use cryptocurrencies, but instead conducted transactions based on digital IOUs or credits.
year 2011
May: The real turning point came in 2011. At the time, cryptography expert David Schwartz, Mt. Gox founder Jed McCaleb and former video game designer-turned-chief strategist Arthur Britto were all interested in Bitcoin. They decided to join forces to build a more efficient system that does not rely on proof-of-work mining.
On the Bitcointalk forum in 2011, McCaleb criticized the energy consumption issues associated with Bitcoin mining.
2012
June: Schwartz, McCaleb and Britto purchased the brand and naming rights to RipplePay founded by Fugger, later renamed it Ripple Labs and launched the XRP ledger.
August: Angel investor Chris Larsen joins Ripple, eventually becoming Ripple’s chief operating officer.
Subsequently, Ripple Labs developed Ripple’s blockchain technology to create RippleNet, a payment network.
year 2013
April: Ripple secures $3.5 million in funding from multiple investors. At the time, Ripple did not disclose the total amount raised.
July: McCaleb leaves Ripple to start his own new project.
Year 2014
February 18: Ripple Labs is ranked No. 50 on MIT Technology Review’s “Top 50 Smart Companies” list.
June: McCaleb launches Ripple competitor Stellar. He was awarded 9 billion XRP for his early contributions to Ripple, which at the time had a market value of approximately $126 million. In 2021, as the price of XRP increased, McCaleb was revealed to have sold his holdings for more than $2 billion.
September: Ripple announces partnerships with CBW Bank and Cross River Bank. Ripple said the two banks are the first U.S. banks to adopt Ripple’s open source distributed transaction infrastructure.
2015
April: Ripple welcomes former Yahoo COO Brad Garlinghouse, who also holds the COO role at Ripple. After taking office, Garlinghouse began marketing XRP to the industry, hoping that the token could be used by banks and financial institutions as a bridge currency and alternative to SWIFT.
May: The United States’ Financial Crimes Enforcement Network (FinCEN) fined Ripple Labs $700,000 in “the first civil enforcement action against a virtual currency exchanger.” The regulator accused Ripple of knowingly violating multiple regulations, such as selling cryptocurrencies without registration and failing to implement anti-money laundering measures. Ripple quickly paid the $450,000 fine and promised to make up the balance within 30 days.
October: Ripple Labs changes its name to Ripple.
According to OpenSecrets statistics, Ripple’s total lobbying expenditure in the United States reached $150,000 in 2015.
2016
June: Ripple receives a virtual currency license from the New York State Department of Financial Services. The company name used in this license application is XRP II LLC.
September: The company successfully closes a Series B funding round, raising $55 million. Investors participating in this financing include Standard Chartered Bank, CME Group, etc.
2017
September: Blockchain startup R 3 sues Ripple Labs over a contract dispute. The dispute between the two parties is that according to the contract, R 3 has the right to purchase XRP at a significant discount until 2019, and Ripple’s CEO tried to terminate the contract. R 3 has since provided solutions for multiple central bank digital currency projects.
December: The price of XRP crosses the $1 mark, a whopping 15,873% increase from the $0.0063 increase on January 1.
According to OpenSecrets, Ripple spent $50,000 on lobbying in 2017.
2018
January: Ripple says it has made its xCurrent product available to more than 100 financial institutions. XRP once surpassed Ethereum to become the second-largest cryptocurrency by market capitalization after Bitcoin.
September: Ripple and R 3 end their contract dispute in a closed-door settlement, with both sides staying tight-lipped about the outcome. But leaked documents in 2020 showed the settlement amounted to more than $240 million.
According to OpenSecrets, Ripple spent $450,000 on lobbying in 2018.
2019
June 17: Ripple announced a partnership with MoneyGram, one of the world’s largest international money transfer companies. MoneyGram will use Ripple’s xRapid product. This collaboration ends in 2021.
December 16: XRP price also plummeted due to the bear market, falling from its all-time high of $3.32 in January 2018 to $0.183.
According to OpenSecrets, Ripple spent $220,000 on lobbying in 2019.
2020
September 24: The XRP Ledger (XRPL) Foundation is established as an independent non-profit entity to promote the implementation of XRP. The foundation raised $6.5 million to create an XRP community fund and strengthen infrastructure.
December 21: SEC files lawsuit against Ripple Labs, Garlinghouse, and Larsen. The SEC alleged that Ripple violated regulations by issuing unregistered securities. Garlinghouse has denied the SECs allegations and said the company will take up legal arms. Following this news, XRP fell from $0.58 to $0.21.
Dec. 22: Judge Analisa Torres is assigned to the Ripple case.
December 28: Crypto exchange Coinbase delists XRP due to lawsuit. Paul Grewal, chief legal officer of Coinbase, said that Ripple’s lawsuit with the SEC was the main reason for XRP’s delisting.
According to OpenSecrets, Ripple spent $330,000 on lobbying in 2020.
2021
March 3: Garlinghouse and Larsen challenge the SEC’s approach, arguing that the agency did not provide them with fair notice of its classification of XRP as a security. Notification or warning so that they have sufficient time to react or make necessary adjustments.). In their letter to the court, they said the SEC failed to provide clear guidance to crypto companies — a claim that was echoed by many crypto executives in the following years.
March 8: The SEC asks Judge Sarah Netburn to hold a hearing to address fair notice requirements for Ripple executives and other matters.
March 22: Judge Netburn rules that XRP has value and utility, which distinguishes it from cryptocurrencies like Bitcoin. The ruling is significant because it highlights the legal differences between cryptocurrencies and paves the way for future asset classification and enforcement actions.
April 13: SEC Commissioner Hester Peirce proposed Safe Harbor Proposal 2.0, which would give crypto companies a three-year grace period “under certain conditions” to exempt them from the registration requirements of the federal securities laws. ” to promote the development and construction of practical or decentralized networks. She also said Genslers appointment as the new SEC chairman is the perfect time for the SEC to reconsider how to responsibly change its rules to accommodate this new technology.
June 14: Court extends SEC disclosure deadline to August 31. The court has previously required the agency to disclose its internal policies regarding cryptocurrency trading, conflicts of interest and securities classification.
August 27: Lawyers for Ripple filed a motion asking the SEC to disclose its policies regarding cryptocurrency trading by its own employees. The application was rejected by the court in September.
October 15: The court sets up an expert consultation period to gather input from a variety of people in the cryptocurrency and traditional finance sectors to add understanding of the different perspectives on the case.
According to OpenSecrets, Ripple spent $1.12 million on lobbying in 2021.
2022
September 17: With court approval, the Chamber of Digital Commerce, an American encryption advocacy group, submitted its own amicus curiae brief. Amicus briefs refer to written materials submitted to the court by individuals or organizations who are not parties to the case. These individuals or organizations may present their own legal arguments and recommendations regarding specific cases in the materials. In its opinion, the Digital Chamber of Commerce did not clearly state which side it supported, but emphasized the ambiguity of digital asset laws.
October 31: Coinbase files an amicus brief in federal court on behalf of Ripple Labs. Coinbase’s submission raised the question of whether the SEC issued a fair notice before taking enforcement action against Ripple. A few months later, in 2023, Coinbase will also face SEC enforcement action.
December 2: Supporting SEC and Ripple Labs filings are made public following the November 30 deadline. The documents shed new light on the arguments and legal claims of both sides. Both the SEC and Ripple Labs urged Judge Torres to rule directly in their favor without taking the case to trial.
December 22: The SEC asked the court to prohibit the release of the Hinman Documents that Ripple Labs believed were relevant to the case, citing the sensitivity of the documents. The documents include a draft of a 2018 speech by former SEC director William Hinman. William Hinman stated in the filing that Ethereum is not a security.
According to OpenSecrets, Ripple spent $1.08 million on lobbying in 2022.
2023
May 8: CEO Garlinghouse says Ripple has spent $200 million on the SEC case.
June 6: The SEC files a lawsuit against Coinbase, alleging it illegally operated the exchange and facilitated trading in unregistered securities.
June 12: Hinman documents are released. While the documents reveal Hinmans previous comments, the disclosure caused little stir.
According to OpenSecrets, Ripple spent $480,000 on lobbying in the first half of 2023.
July 13: SEC splits ruling in case against Ripple Labs. Judge Torres ruled that Ripple’s public sale of XRP to exchanges was not illegal, but its sale to institutions was. Ultimately, the case will go to a jury trial. Following the ruling, Coinbase and other exchanges relisted XRP.
July 21: In a separate Terraform Labs case, a judge questions Torres’ ruling, and the SEC later hints at a possible appeal.
July 24: Sendi Young, Ripple’s head of UK and European operations, says this partial victory sets the stage for Ripple’s further international expansion.
August 7: A former SEC litigator says just because the presiding judge in the Terraform Labs case overturned Judge Torres’ ruling doesn’t mean Ripple has lost the game. Teresa Goody Guillén, a partner at the law firm Baker Hostetler and a former SEC litigation counsel, said: “The simple reason is that this court clearly rejected the XRP ruling, and another court could just as easily make a different decision.”
August 9: The same day Judge Torres sets the trial schedule for the second quarter of 2024, the SEC announces it will appeal part of her July ruling.
August 17: Media revealed that Ripple was one of the crypto companies spending the most on lobbying in the United States in 2023. The list also includes Binance, Coinbase, and Crypto.com.
August 28: Ripple announced on X (formerly Twitter) that it will host a “community celebration” in New York City in September. As promised, its time for a real victory party, Garlinghouse tweeted.
September 6: Media reports claim that Ripple has paid lobbying groups to try to influence U.S. legislation through lobbying, thereby making the Commodities and Futures Trading Commission (CFTC) the de facto cryptocurrency regulator in the United States. . Many crypto industry professionals believe that the CFTC is a friendlier regulator and takes a softer regulatory approach than the SEC. Former FTX CEO Sam Bankman-Fried lobbied the CFTC to regulate cryptocurrencies before his exchange collapsed.
Oct. 3: Torres denies SEC appeal.
October 19: The SEC drops all charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen, canceling a trial scheduled for next year. The SEC stated in the filing: The SEC and Ripple will meet and agree on a possible briefing schedule on the remaining issues in this case – Ripple’s institutional sales of Propose that schedule and, if the parties cannot agree, seek a briefing schedule from the court.
