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Ripple Labs is now attempting to bring a complaint against them regarding XRP status as potential security in a federal court, which is praised as a brilliant strategic move by a well-known lawyer who knows the situation.
The lawsuit against Ripple Labs was initially brought forward by the plaintiffs. They are accusing the blockchain company of offering investors an unregistered security product (XRP) that has been mischievously manipulated by Ripple to enable them to maximize profits from the distribution and sale of these tokens.
Although the cause itself is trivial and is primarily driven by some newcomers, who were burned after buying XRPs at incredibly high prices, the results could be incredibly incisive for XRP and its investors.
If it were to be regarded as a product of unregistered securities by the courts, it would lose much of its practicality as a settlement instrument, and would be obliterated by most major stock exchanges, significantly wiping out its liquidity.
Because of the importance of the outcome of this case, Ripple enlisted the leading law firm Skadden, to represent XRP, as well as prominent attorneys from Debevoise & Plimpton, including former SEC president Mary Jo White and l & # 39; Former chief of security forces SEC, Andrew Ceresney.
On Wednesday, Skadden filed a notice of removal, claiming that the case should be transferred to a federal court due to Supreme Court judge San Mateo joining another case brought against Ripple by a resident Israeli in a consolidated collective action of California.
The law firm noted that the merging of the case with an international player makes consolidation in a federal court admissible under the Class Action Fairness Act:
"A & # 39; putative class action may be removed at the appropriate federal district court if (1) the action claims to be a & # 39; class action & # 39; scope on behalf of 100 or more members, (2) each member of a class of plaintiffs is a citizen of a state other than any defendant, and (3) the amount in dispute exceeds $ 5 million. "
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Ripple's lawyers attempt to move the case to a federal court is incredibly strategic and is probably an attempt to raise more chances of winning the case.
In a recent tweet by Jake Chervinsky, a lawyer for the defense of the government's execution and of the stock dispute over Kobre & Kim, he explained the move, calling it "slick" and "brilliant", saying this:
"Ripple's legal team shows some tactical brilliance here – it's hard to explain the procedural maneuver in a tweet and I'm not going to do it, but suffice it to say it's a seriously smart attempt to become a federal. , but smooth regardless. "
Chervinsky further has explained that it is difficult to say what their chances are of winning the case, but that their attempt to move the case to a federal court could increase their chances.
"I can not talk about their chances of winning since the case is still so young and I do not know all the facts, but it's fair to say that Ripple's lawyers think they're more likely to win in federal court than in state court (or they would not have tried so hard to remove the case), "he said.
XRP investors will have more information about the case in the months and years to come, although it is important to understand that the case could take a long time to find a deliberate solution.
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