The next phase of the U.S. Securities and Exchange Commission (SEC) v. Ripple case is about to move forward, with U.S. District Court Judge Analisa Torres for the Southern District of New York filing documents on July 17 to transfer the case to Magistrate Judge Sarah Neborn.
Journalist Eleanor Terrett first reported that the court had issued an “amended magistrate’s transfer order,” transferring judicial oversight of the case to the magistrate’s office.
New: District Judge Torres has filed @ripple Refer case to Magistrate Netburn for general preliminary hearing (including timing, discovery, non-conclusive preliminary hearing motions and settlements). pic.twitter.com/EyrA3flpXC
— EleanorTerrett (@EleanorTerrett) July 17, 2023
The one-page document reviewed by Cointelegraph suggests that the next step will be a general pre-trial.This stage usually requires discovery and a brief window Increase Objections.
A general preliminary hearing is the part of the proceeding with the greatest chance of a settlement. As Cointelegraph recently reported, experts believe the SEC is unlikely to appeal Torres’ ruling last week.
Related: In SEC Case Against Ripple, Judge Rules XRP Is Not a Security
A partial victory for Ripple came when Torres ruled on July 13 to dismiss allegations that Ripple violated the law by issuing XRP (XRP) tokens on public exchanges. This is taken to mean that XRP is not a security, which has implications for the entire cryptocurrency market.
However, the remaining allegation is that XRP was sold as a security when Ripple sold XRP directly to investors through a marketing plan that emphasized several aspects of XRP that, according to the SEC, could lead to Investors view it as a security.
Netburn will oversee the next phase, as some experts predict the SEC may be inclined to allow Ripple to settle the case.
Netburn has been involved throughout the trial of the case, including on several previous motions. Netburn ordered the release of the much-anticipated “Hinman Files,” a collection of SEC documents that include the text of a 2018 speech by then-Commissioner William Hinman that are widely seen as resembling smoking guns.
While the release of these documents may not have had the effect the cryptocurrency community ostensibly hoped for, the partial victory achieved by Ripple has greatly affected the overall sentiment of the cryptocurrency.
Aside from the fact that Netburn has challenged the SEC’s claims in the case, there is every reason to believe the positive sentiment will continue. At press time, XRP is trading at $0.72, down from last week’s peak but still up more than 56% since July 13.
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