In the ongoing legal battle between the United States Securities and Exchange Commission (SEC) and Ripple, the case is now progressing to the next phase. U.S. District Judge Analisa Torres of the Southern District of New York has filed paperwork on July 17 referring the case to Magistrate Judge Sarah Netburn. This move transfers judiciary oversight of the case to the Magistrate’s office for General Pretrial, which includes scheduling, discovery, non-dispositive pre-trial motions, and settlement.
The court’s “amended order of reference to a Magistrate” was first reported by journalist Eleanor Terrett. This development suggests that the case is moving forward and indicates that the next step will be the general pretrial phase, where parties engage in the discovery process and have a short window to raise objections.
General pretrial is a critical phase of the legal proceedings where settlement discussions often take place. Experts following the case believe that the SEC is unlikely to appeal the previous week’s rulings by Judge Torres. This comes after Judge Torres dismissed the allegation that Ripple violated the law by publicly listing its XRP token on exchanges. The ruling implies that XRP is not a security, which has broader implications for the entire cryptocurrency market.
However, the allegations that XRP was sold as a security when Ripple directly sold it to investors through a marketing scheme still remain. These accusations will be further examined in the upcoming phase overseen by Judge Netburn, who has been involved in the case from the beginning and has previously made significant rulings. Netburn had also ordered the release of the “Hinman Documents,” a collection of SEC files containing a speech delivered by director William Hinman in 2018. These documents were anticipated to be crucial evidence but may not have had the expected impact on the case.
Despite this, the partial victory for Ripple in the dismissal of one allegation has had a significant impact on overall cryptocurrency sentiment. Judge Netburn’s history of challenging the SEC’s assertions in the case adds to the positive sentiment surrounding Ripple. As a result, XRP’s price has remained steady, trading at $0.72 at the time of publication, which is still up over 56% since July 13.
As the case moves to the next phase with Magistrate Judge Netburn overseeing the proceedings, there is speculation that the SEC might be inclined to settle the case. The potential settlement could lead to a resolution that benefits both parties involved. The cryptocurrency community continues to closely follow this high-profile legal battle that could shape the future of how cryptocurrencies are regulated in the United States.