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The pretrial of the lawsuit against Ripple by the Securities and Exchange Commission (SEC) is set for Feb. 22, 2021, according to a court document in the United States District Court of the Southern District of New York. 

The counsel representing both parties will lead the telephone pretrial concerns ahead of the preliminary hearing, to do “(1) a brief description of the case, including the factual and legal basis for the claim(s) and defense(s), (2) any contemplated motions and (3) the prospect for settlement.”

Earlier this month, the SEC sued Ripple for allegedly violating federal securities laws by conducting an unregistered initial coin offering (ICO). The regulator alleged that the cryptocurrency company, ts co-founder Christian Larsen, and CEO Bradley Garlinghouse raised more than $1.38 billion by illegally selling over 14.6 billion units of XRP. The SEC considers XRP as "digital asset security."

Coinbase, the popular cryptocurrency exchange platform reacted to the lawsuit by limiting the XRP trading and will suspend it for good on January 19, 2021. This has resulted in a 65% decrease in the XRP price.

A majority  of Ripple customers are based overseas

Meanwhile, Ripple CEO Garlinghouse stated that only 5% of the company's clients are located in the United States. The company is willing to relocate soon as a response to the lawsuit by the SEC.

In an interview with CNN, Garlinghouse said, “95% of our customers are non-U.S. and only about 5% are here in the U.S. People say ‘You are a U.S. company, [...] why is that?’ One of the dynamics is that U.S. companies are waiting for clarity, and that clarity emanates from the Securities and Exchange Commission.”

“For us, around XRP and over 100 companies that are working with XRP getting that clarity, it’s very clear to me that XRP is being used by many companies as a currency. You had the U.S. Department of Justice refer to XRP as a currency, you had FinCEN refer to XRP as a currency. But you haven’t yet had that clarity from the SEC” he added.

Ripple in talks with SBI Holdings regarding its plan to move to Japan

Ripple is planning to relocate its business to Japan. Garlinghouse said that he is in talks with  SBI  Holdings, one of the biggest financial firms in Japan, regarding the plan,

“Japan is one of our fastest-growing markets, in part because we have key partners like SBI,” says Garlinghouse.

In Japan, XRP “is widely traded in cryptocurrency exchanges” and the Japanese government does not consider it as a security, according to Sadakazu Osaki, an analyst at Nomura Research Institute.