How Ripple Could Reduce Speculated SEC Penalty by $770 Million
Legal specialist Jeremy Hogan has outlined tactics that Ripple could employ to significantly decrease the speculated $770 million penalty sought by the SEC. Hogan suggests that Ripple should calculate the SEC’s pursuit of “disgorgement” using net profits rather than total revenue. By deducting business expenses, Ripple could potentially reduce the demanded amount substantially. Another argument raised by Hogan is the jurisdictional reach of the SEC, which is limited to U.S. soil. He posits that only sales of XRP with a U.S. nexus should be considered by the SEC, potentially narrowing the scope of the case and associated penalties.
SEC vs. Ripple: Recent Developments
In December 2020, the SEC filed a lawsuit against Ripple Labs, alleging unregistered securities offering through XRP sales. Judge Analisa Torres ruled that XRP is not a security when traded on secondary markets, marking a turning point in the case. Ripple’s legal team also references a recent Second Circuit ruling in SEC v. Govil, which requires the SEC to demonstrate actual financial harm before demanding significant disgorgement. The latest development involves Judge Torres ordering the SEC and Ripple to propose a briefing schedule regarding institutional sales of XRP, focusing on alleged securities law breaches.
Hot Take: Potential Strategies for Ripple’s Defense
Ripple has a chance to reduce its speculated $770 million penalty sought by the SEC through strategic defense tactics. By calculating “disgorgement” using net profits instead of total revenue and highlighting jurisdictional limitations, Ripple may significantly lower the demanded amount. Recent developments in the case, including Judge Torres’ ruling on XRP as a non-security and reductions in charges against Ripple executives, have favored Ripple’s position. The upcoming joint briefing schedule for institutional sales of XRP will provide further insights into the potential outcome of the lawsuit. Ripple’s legal team, led by chief lawyer Stuart Alderoty, continues to navigate the complex legal landscape.
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