Ripple vs. SEC: Decrypting the SEC’s Damage Theory 🕵️♂️
If may have missed the recent update, crypto expert James Murphy and Wolf of Wall Street Scott Melker share insights on the SEC’s damages theory in the Ripple case. The duo explores a fortunate turn of events for Ripple in a recent video.
Understanding the SEC’s Damage Theory 📚
- A recent decision by the Second Circuit Court of Appeals raises a crucial concern regarding a legal precedent.
- The SEC must demonstrate wrongdoing by identifying victims who have experienced actual financial losses.
- Melker sheds light on the SEC’s losses theory, revealing a significant flaw.
- No XRP buyers can be pinpointed as having suffered financial losses.
- The SEC’s argument relies on the notion that some users bought XRP at lower prices.
- This claim exceeds the concept of “pecuniary harm” without concrete evidence of specific entities losing money.
- The absence of clear victims significantly weakens the SEC’s case.
- The principle of disgorgement, aimed at returning illicit profits to affected parties, falters without identifiable victims.
- This raises concerns about the legitimacy of the claimed $200 million interest by the SEC.
Questioning the SEC’s Penalty 🤔
Melker’s analysis suggests that Ripple may have caught a lucky break in the court case. With no evidence of genuine harm, justifying the proposed $850 million penalty becomes challenging. Demonstrating actual financial harm is crucial in securities litigation, hinting at Ripple having a stronger position than previously assumed.
Implications for the Future 🔮
The SEC’s demand for a hefty $2 billion penalty has stirred controversy. Ripple retaliates, denouncing the charges as intimidation tactics and an overreach of authority. If the court rules in favor of the SEC and imposes the $2 billion fine on Ripple, the company may need to sell approximately 3.22 billion XRP coins at the current market price of $0.62 per coin to generate the required funds.
- Ripple could potentially utilize its reported $1 billion cash reserves, as disclosed by CEO Brad Garlinghouse, to cover the penalty.
- This move could mitigate the immediate impact on XRP’s market dynamics.
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