Source: DLNews
Compilation: LianGuaiBitpushNews Yanan
The dispute between Ripple and the U.S. Securities and Exchange Commission (SEC) is far from over, and both sides are preparing for a courtroom showdown in the second quarter of next year.
Earlier, Ripple CEO Brad Garlinghouse said the company had paid over $200 million in legal fees.
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When District Judge Analisa Torres made a partially favorable ruling against Ripple in July, some cryptocurrency experts saw it as a clear victory for Ripple.
As a result of this ruling, the price of XRP, the token used for Ripple’s network transactions, soared.
However, under the leadership of Chairman Gary Gensler, the SEC did not let Ripple off the hook. Since the bankruptcy of the cryptocurrency exchange FTX last year, the agency has launched a series of enforcement actions against the entire cryptocurrency industry, including lawsuits against cryptocurrency exchanges Binance and Coinbase.
Last week, a judge rejected the SEC’s appeal regarding the Ripple case. While this result was somewhat disappointing for the SEC, more unresolved issues will be addressed in the trial in 2024.
In order to help you gain a deeper understanding of the entire event and its future direction, we have compiled the following timeline for your reference.
2004
The origin of Ripple can be traced back to 2004. At that time, Canadian programmer Ryan Fugger launched a peer-to-peer payment system called RippleLianGuaiy. The system was introduced before the rise of blockchain technology and did not use cryptocurrency, but instead relied on digital IOUs or credits for transactions.
2011
May: The real turning point came in 2011. At that time, cryptography expert David Schwartz, Mt. Gox founder Jed McCaleb, and Arthur Britto, who was a video game designer and later became the Chief Strategy Officer, all developed a strong interest in Bitcoin. They decided to work together to build a more efficient system that did not rely on proof-of-work mining.
In 2011, McCaleb criticized the energy consumption issues caused by Bitcoin mining on the Bitcointalk forum.
2012
June: Schwartz, McCaleb, and Britto purchased the brand and naming rights of RippleLianGuaiy created by Fugger, and renamed it Ripple Labs, launching the XRP ledger.
August: Angel investor Chris Larsen joined Ripple and eventually became the Chief Operating Officer of Ripple.
Subsequently, Ripple Labs developed Ripple’s blockchain technology, creating the RippleNet payment network.
2013
April: Ripple raised $3.5 million in funding from multiple investors. At the time, Ripple did not disclose the total amount of funding.
July: McCaleb left Ripple to start his own new project.
2014
February 18: Ripple Labs ranked 50th on MIT Technology Review’s “50 Smartest Companies” list.
June: McCaleb founded Stellar, a competitor to Ripple. He was gifted 9 billion XRP for his early contributions to Ripple, which was valued at around $126 million at the time. In 2021, it was reported that McCaleb sold his holdings for over $2 billion as the price of XRP rose.
September: Ripple announced partnerships with CBW Bank and Cross River Bank. Ripple stated that these two banks were the first US banks to adopt Ripple’s open-source distributed transaction infrastructure.
2015
April: Ripple welcomed former Yahoo COO Brad Garlinghouse as its own COO. After taking the position, Garlinghouse began promoting XRP to the industry, hoping that the token could serve as a bridge currency and an alternative to SWIFT for banks and financial institutions.
May: The Financial Crimes Enforcement Network (FinCEN) in the US fined Ripple Labs $700,000 in what it claimed to be the “first-ever civil enforcement action against a virtual currency exchanger.” Regulators accused Ripple of intentionally violating multiple regulations, such as selling cryptocurrencies without registering and failing to implement anti-money laundering measures. Ripple quickly paid a $450,000 fine and promised to make up the remaining amount within 30 days.
October: Ripple Labs changed its name to Ripple.
According to OpenSecrets, Ripple’s lobbying spending in the US reached $150,000 in 2015.
2016
June: Ripple obtained a virtual currency license from the New York Department of Financial Services. The company that applied for the license was named XRP II LLC.
September: The company successfully completed a Series B funding round, raising $55 million. Investors participating in this round included Standard Chartered Bank, CME Group, and others.
2017
September: Blockchain startup R3 sued Ripple Labs over a contract dispute. The dispute centered around the fact that, according to the contract, R3 had the right to purchase XRP at a significant discount until 2019, but Ripple’s CEO attempted to terminate the agreement. R3 later provided solutions for several central bank digital currency projects.
December: XRP’s price surpassed $1, marking a 15,873% increase from its price of $0.0063 on January 1.
According to OpenSecrets, Ripple’s lobbying spending in 2017 amounted to $50,000.
2018
January: Ripple announced that it had provided its xCurrent product to over 100 financial institutions. XRP briefly surpassed Ethereum and became the second-largest cryptocurrency by market capitalization, following only Bitcoin.
September: Ripple and R3 settled their contract dispute in a closed-door manner, and both parties remained tight-lipped about the settlement. However, leaked documents in 2020 showed that the settlement amount exceeded $240 million.
According to OpenSecrets, Ripple’s lobbying expenses in 2018 were $450,000.
2019
June 17: Ripple announced a partnership with MoneyGram, one of the world’s largest international remittance companies. MoneyGram would use Ripple’s xRapid product. This partnership ended in 2021.
December 16: Due to the bear market, the price of XRP also plummeted from its all-time high of $3.32 in January 2018 to $0.183.
According to OpenSecrets, Ripple’s lobbying expenses in 2019 were $220,000.
2020
September 24: The XRPL Foundation was established as an independent non-profit entity to promote the development of XRP. The foundation raised $6.5 million to create the XRP Community Fund and strengthen infrastructure construction.
December 21: The SEC filed a lawsuit against Ripple Labs, Garlinghouse, and Larsen. The SEC claimed that Ripple had illegally issued unregistered securities. Garlinghouse denied the SEC’s allegations and stated that the company would fight back with legal means. After this news was released, XRP dropped from $0.58 to $0.21.
December 22: Judge Analisa Torres was assigned to handle the Ripple case.
December 28: Due to the lawsuit, the cryptocurrency exchange Coinbase delisted XRP. Coinbase’s Chief Legal Officer, LianGuaiul Grewal, stated that the lawsuit between Ripple and the SEC was the main reason for delisting XRP.
According to OpenSecrets, Ripple’s lobbying expenses in 2020 were $330,000.
2021
March 3: Garlinghouse and Larsen questioned the SEC’s actions, stating that the agency did not provide them with fair notice before classifying XRP as a security. In their letter to the court, they stated that the SEC failed to provide clear guidance to cryptocurrency companies – a statement that many cryptocurrency executives would refer to in the following years.
March 8: The SEC requested Judge Sarah Netburn to hold a hearing to address the fair notice request from Ripple executives and other matters.
March 22: Judge Netburn ruled that XRP has value and utility, distinguishing it from other cryptocurrencies like Bitcoin. This ruling is significant as it emphasizes the legal differences between cryptocurrencies and paves the way for future asset classification and enforcement actions.
April 13: SEC Commissioner Hester Peirce proposed the Safe Harbor Proposal 2.0, which would grant cryptocurrency companies a three-year grace period under “certain conditions” to “exempt them from the registration requirements of federal securities laws” in order to promote the development and construction of utility or decentralized networks. She also stated that Gensler’s appointment as the new SEC chairman is an opportunity for the SEC to reconsider how to responsibly modify the rules to accommodate this new technology.
June 14: The court extends the deadline for SEC’s disclosure to August 31. The court had previously requested the agency to disclose its internal policies regarding cryptocurrency transactions, conflicts of interest, and securities classification.
August 27: Ripple’s lawyers filed a motion requesting the SEC to disclose its policy regarding its employees’ cryptocurrency transactions. This application was rejected by the court in September.
October 15: The court establishes an expert consultation period to collect opinions from various stakeholders in the cryptocurrency and traditional financial sectors, in order to gain a better understanding of 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, a US cryptocurrency advocacy organization, submitted its own amicus curiae brief. An amicus curiae brief is a written submission to the court by a non-party individual or organization. These individuals or organizations can present their legal arguments and suggestions regarding specific cases in the submission. The Chamber of Digital Commerce did not explicitly state which side it supports in the brief, but emphasized the ambiguity of digital asset laws.
October 31: Coinbase, representing Ripple Labs, submitted an amicus curiae brief to the federal court. Coinbase raised a question in the brief about whether the SEC had issued a fair notice before taking enforcement action against Ripple. Several months later, in 2023, Coinbase will also face enforcement action from the SEC.
December 2: After the November 30 deadline, the supporting statements from the SEC and Ripple Labs were made public. These statements provide new insights into the arguments and legal claims of both parties. The SEC and Ripple Labs both urge Judge Torres to make a favorable ruling without the need for a trial.
December 22: The SEC requests the court to prohibit the public disclosure of the “Hinman documents” that Ripple Labs believes are relevant to this case, citing document sensitivity. These documents include a speech draft from former SEC director William Hinman in 2018. In the documents, William Hinman stated that Ethereum is not a security.
According to OpenSecrets, Ripple spent $1.08 million on lobbying in 2022.
2023
May 8: CEO Garlinghouse stated that Ripple has spent $200 million on the SEC case.
June 6: The SEC files a lawsuit against Coinbase, alleging its involvement in operating an illegal exchange and facilitating unregistered securities transactions.
June 12: The Hinman documents are made public. Although these documents disclose Hinman’s previous statements, their public release did not cause much controversy.
According to OpenSecrets, Ripple spent $480,000 on lobbying in the first half of 2023.
July 13: There is a ruling disagreement in the SEC v. Ripple Labs case. Judge Torres rules that it is not illegal for Ripple to publicly sell XRP on exchanges, but selling XRP to institutions is considered illegal. Ultimately, the case will be decided by a jury trial. After this ruling, Coinbase and other exchanges relist XRP.
July 21: In another Terraform Labs case, a judge questioned Torres’ ruling, and the SEC subsequently hinted at a possible appeal.
July 24: Sendi Young, Ripple’s Head of UK and European Operations, stated that this partial victory has laid the foundation for Ripple’s further international expansion.
August 7: Former SEC litigation lawyer stated that just because the presiding judge in the Terraform Labs case rejected Torres’ ruling does not mean that Ripple has lost the game. Teresa Goody Guillén, a partner at BakerHostetler law firm and former SEC litigation advisor, said, “The reason is simple. This court explicitly rejected the XRP ruling, and another court can easily make a contrary decision.”
August 9: On the same day that Judge Torres set the trial schedule for the second quarter of 2024, the SEC announced that it would appeal the partial ruling she made in July.
August 17: Media revealed that Ripple is one of the cryptocurrency companies that spent 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 known as Twitter) that it will hold a “community celebration event” in New York City in September. Garlinghouse tweeted, “As promised, it’s time for a real victory party.”
September 6: Media reports that Ripple has paid lobbying groups to try to influence US legislation in order to make the Commodities and Futures Trading Commission (CFTC) the de facto cryptocurrency regulatory agency in the United States. Many professionals in the cryptocurrency industry believe that compared to the SEC, the CFTC is a more friendly regulatory agency and adopts a more moderate regulatory approach. Sam Bankman-Fried, former CEO of FTX, lobbied the CFTC for cryptocurrency regulation before his exchange collapsed.
October 3: Torres rejected the SEC’s appeal.
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