Judge declines XRP investors attempt to become third-party defendants in SEC case

Investors in XRP are now unlikely to get a seat at the table in the ongoing court battle against Ripple, following a ruling from a U.S. court.

U.S. District Judge Analisa Torres denied a motion that was filed last weekend on behalf of some 6,000 investors in XRP, which argued that they were not being sufficiently represented during the legal proceedings brought against the firm by the U.S. Securities and Exchange Commission (SEC).

According to the motion, XRP holders had lost out to the tune of $15 billion after the SEC announced it was commencing proceedings against Ripple. This saw XRP prices fall from $0.58 to $0.21 by December 2020, though prices have recovered some ground since that date.

The motion was rejected in the first instance, though lawyers acting on behalf of the investors could still subsequently refile at a later date. As part of the filing, the investors’ representatives sent a pre-motion letter to the securities regulator, pending response.

The SEC is afforded just three days to respond to the letter as per court rules, though has requested to extend the period until March 22. Pending a further, successful, motion on behalf of the investors, it is now unlikely they will have any further role to play in the ongoing legal proceedings.

Ripple and senior executives CEO Brad Garlinghouse and co-founder Chris Larsen were charged by the SEC over an “unregistered, ongoing digital asset securities offering” in respect of XRP tokens, after the regulator found they constituted a security under U.S. securities law.

As a result, a number of digital currency exchanges and other platforms suspended support for Ripple, or chose to delist the digital currency outright, sparking a chain reaction that saw prices plummet by some 60%.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups-from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple and 
Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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