Understanding Ripple’s Legal Battle with the SEC
Ripple Labs recently made a compelling argument in their ongoing lawsuit against the US Securities and Exchange Commission (SEC). By referencing the Terraform Labs settlement, Ripple sought to decrease the proposed penalty of $2 billion to a mere $10 million.
An In-depth Look at Ripple’s Position in the SEC Lawsuit
In the legal dispute between Ripple and the SEC, the company highlighted that the SEC’s proposed $2 billion penalty was unjustified, as outlined in a “notice of supplemental authority.”
- Ripple’s lawyers pointed out significant differences between their case and Terraform Labs’. While Terraform faced fraud charges leading to a global value loss, Ripple is accused only of selling unregistered securities without any fraud allegations.
- The SEC’s pursuit of a similar penalty in both cases, despite differing charges, was deemed unfair by Ripple’s legal team.
Judge Jed Rakoff in the New York District Court approved the SEC and Terraform Labs settlement on June 13. The settlement involved $3.6 billion in disgorgement fines, a $420 million civil penalty, and nearly $467 million in prejudgment interest.
Insight into the Ongoing Legal Battle Between Ripple and the SEC
Ripple has been entangled in a lengthy legal standoff with the SEC since December 2020 when the regulator sued the company for illicitly raising over $1.3 billion through the sale of XRP tokens. The SEC alleged that XRP constituted unregistered securities.
- A New York federal court ruling in July 2023 clarified that selling XRP on exchanges and through algorithms did not violate US securities laws, but sales to institutions did.
- Initially, the lawsuit targeted Ripple’s CEO and Co-Founder, but charges against them were eventually dropped in October 2023.
In March 2024, the SEC proposed a recovery and civil penalty amounting to $1.95 billion. However, Ripple contested this amount by advocating for a reduced penalty of $10 million and rejecting the SEC’s requests for an injunction, disgorgement, and pre-judgment interest.
Speculations on the Future Outcome of the Ripple-SEC Legal Saga
Despite the intense legal battles and negotiations between Ripple and the SEC, industry experts predict that the saga may reach a conclusion by the end of 2024.
Hot Take: Looking Ahead to Ripple and SEC’s Resolution
As the legal dispute between Ripple and the SEC continues, both parties are navigating uncharted waters in the crypto regulatory landscape. Stay tuned for updates on the outcome of this high-stakes legal battle that could shape the future of digital asset regulation.
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