The first pre-trial conference in the US Securities and Exchange Commission lawsuit against Ripple for the sale of XRP was set for February 22, 2021.
Ripple and the SEC will meet by video call, according to a court order from the United States District Court for the Southern District of New York.
In the order, US District Judge Analisa Torres asks the parties to respond with a joint statement covering the case’s legal arguments and bases, possible motions and the likelihood of settlement.
The pre-judgment conference would mark the beginning of the trial portion of the SEC’s lawsuit against Ripple Inc. for the sale of about $ 1.3 billion in XRP tokens. This is the first time that the regulator is taking a digital asset issuer with its own network to court, although it has sued many Ethereum token issuers in the past.
As with other instruments in its regulatory scope, the SEC sees digital tokens under the lens of the Howey Test. The result of a 1946 lawsuit, the Howey Test is a checklist used to judge whether or not an investment contract is a security under the Securities Act and Securities Exchange Act of 1933 and 1934.
Under the test, a guarantee is offered if “a person invests their money in a joint venture and is led to expect profits solely from the efforts of the promoter or third parties.”
Since the SEC announced its lawsuit, several popular exchanges have announced that they are suspending XRP trading. Currently trading at $ 0.21, the XRP has dropped 56% since the SEC announced the lawsuit last week.