Court favors plaintiffs, allowing key expert testimonies against Ripple Labs.
Jury trial set for January; conflicting expert views on Ripple's impact on XRP to be debated.
Ripple's SEC case progresses to appeals, complicating legal challenges for the company.
A U.S. district judge has issued significant rulings in the class action lawsuit against Ripple Labs Inc., delivering a mixed outcome as the case advances toward trial.
This development follows recent settlement discussions between Ripple and the plaintiffs, which failed to yield a resolution. The judge’s orders, mostly in favor of the plaintiffs, clarify key elements regarding expert testimonies, which Ripple Labs and its co-defendants had sought to exclude.
Meanwhile, the Ripple vs. SEC case is set to proceed on appeal, with both parties recently filing necessary documentation to the U.S. Second Circuit Court of Appeals.
In a notable decision, the court rejected Ripple Labs’ motions to exclude two plaintiff expert testimonies, adding weight to the plaintiffs' arguments regarding Ripple's influence over the XRP ecosystem. U.S. District Judge Hamilton upheld the testimonies of Jeremy Clark and Saifedean Ammous, noting that both experts provided reliable conclusions pertinent to the case.
Clark’s testimony, in particular, argued that the XRP Ledger relies significantly on Ripple and that XRP’s distribution has primarily benefited the company. Ripple’s claim that Clark lacked specific expertise on XRP was dismissed.
Judge Hamilton affirmed that his testimony addressed essential factual questions, such as Ripple’s influence over the ecosystem, a matter relevant to the Howey Test used to determine if a financial instrument qualifies as a security.
In a parallel decision, Judge Hamilton granted plaintiffs’ request to exclude Ripple’s expert Alan Schwartz’s testimony on the nature of investment contracts, stating it did not meet admissibility standards.
This ruling prevents Schwartz from presenting testimony that could counter the plaintiffs’ argument that Ripple’s XRP sales might constitute an investment contract under U.S. securities law. However, the court did allow the exclusion of plaintiff expert Joel Seligman’s testimony, a move favorable to Ripple’s defense.
The court's decisions have paved the way for a jury trial set to begin in January. At the trial, experts from both sides will present conflicting views on whether Ripple’s actions affect XRP’s price.
Ripple’s expert Allen Ferrell and plaintiff expert Saifedean Ammous present opposing conclusions on this point, with Judge Hamilton affirming the jury’s role in evaluating the impact of Ripple’s actions on the digital asset’s market value.
