Ripple vs SEC: How Sarah Netburn’s Nomination Could Shape the Outcome

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Sarah Netburn’s recent nomination as District Judge in the Southern District of New York (SDNY) holds significant implications, particularly within the ongoing legal confrontation between Ripple vs SEC. As the sitting judge presiding over the Ripple vs. SEC case, Netburn’s demonstrated pro-crypto stance and reputation for rendering equitable judgments could potentially tilt the scales in favor of Ripple. 

The timing of her nomination is crucial as the unresolved matter of Ripple’s opposition to the SEC’s hefty civil penalties underscores the importance of her judicial role.

Why it Matter? 

In its recent filing, Ripple aggressively contested the SEC’s unreasonable demands instead of proposing a maximum penalty of $10 million. With three key arguments challenging the SEC’s claims and emphasizing changes in XRP sales practices, Ripple’s position appears strong. The court’s impending ruling, particularly with Judge Sarah Netburn’s nomination as District Judge, could greatly favor Ripple. If Netburn supports Ripple’s stance, the SEC may face significant setbacks, making it unlikely for them to overturn her decision on appeal.

Furthermore, she was widely praised by the legal community. Paul Grewal, the Chief Legal Officer of Coinbase, has publicly praised Sarah Netburn’s nomination as District Judge, acknowledging her significant contributions to the understanding of crypto-related legal matters. In a post on X, Grewal congratulated Netburn and emphasized the importance of talented judges in administering justice, particularly in the context of cryptocurrency litigation. 

Similarly, Bill Morgan, a prominent XRP advocate, praised Netburn’s nomination, highlighting her fair rulings and handling of the SEC vs. Ripple case. Morgan’s support indicates Netburn’s respected judicial integrity and competence, suggesting her appointment as District Judge is deserved and could favor Ripple’s legal stance.

The latest Update on Ripple vs SEC

In the meanwhile Ripple has filled a motion to Magistrate Judge Sarah Netburn for excluding expert materials submitted by the SEC, alleging that these crucial documents were shown during the discovery phase of the remedies litigation. The motion underscores the SEC’s failure to present a supplemental expert report on disgorgement and a key declaration by Andrea Fox, an SEC assistant chief accountant, during discovery. 

Ripple argues that this withholding denied them the chance to counter the SEC’s arguments adequately. Additionally, Ripple contests the SEC’s designation of Fox as a “summary witness” rather than an “expert witness”, claiming that her analysis qualifies her as an expert whose opinions should have been disclosed earlier.

The SEC opposes Ripple’s request for exclusion, and a revised schedule for further proceedings has been proposed. Moreover, the outcome of Ripple’s motion could significantly impact the SEC’s position on remedies, influencing the broader outcome of this high-stakes case with implications for the cryptocurrency sector as a whole.

The SEC will submit its reply brief by May 6, with parties and third parties having until May 20 to oppose sealing details in the filings.