SEC Demands $770 Million Penalty from Ripple
The U.S. Securities and Exchange Commission (SEC) is seeking a $770 million penalty from Ripple for violating securities laws, according to crypto lawyer John Deaton. The SEC has lost multiple legal battles against Ripple, leading to this penalty. Last week, charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen were dropped by the regulator. However, District Judge Analisa Torres rejected the agency’s attempt to appeal her ruling on XRP earlier this month.
Deaton stated that the SEC is “pissed and embarrassed” and wants to extract $770 million from Ripple.
Deaton explained that the penalty phase is like a separate case, requiring more legal procedures and evidence gathering. He believes that it could take up to a year before an appeal is filed and a final judgment is issued by Judge Torres. Deaton referred to the LBRY case, where the SEC initially sought $23 million but was ultimately fined $130,000 after eight months of litigation.
Coinbase Lawsuit Outcome Could Impact Ripple’s Penalty
Deaton also mentioned that the outcome of the SEC’s lawsuit against Coinbase will influence the final amount Ripple has to pay. If Coinbase wins its motion-to-dismiss (MTD), Deaton predicts that the SEC will be forced to change its anti-crypto agenda and potentially settle with Ripple. However, if Coinbase loses its MTD, he believes there will be no settlement.
The lawyer noted that oral arguments for the Coinbase motion are scheduled for January 17, 2024, with a ruling expected 60-120 days later. During this time, Deaton expects Ripple to spend millions of dollars on legal fees to significantly reduce the $770 million penalty.
Reducing the Penalty for Ripple
Deaton expressed confidence that Ripple will successfully reduce the $770 million penalty. He emphasized that this is not a fraud case but rather a matter of determining an appropriate fine for unregistered securities sales conducted within the context of virtual currencies. Deaton expects Ripple to fight to reach a fair outcome in terms of the penalty imposed.
Hot Take: Ripple Faces Hefty Penalty as SEC Seeks Revenge
The U.S. Securities and Exchange Commission (SEC) is seeking a $770 million penalty from Ripple after losing several legal battles against the crypto firm. This move by the SEC demonstrates its determination to punish Ripple for violating securities laws, and it reflects the regulator’s frustration and embarrassment over its past failures. While Ripple will likely fight to significantly reduce the hefty penalty, its outcome will be influenced by the SEC’s lawsuit against Coinbase. If Coinbase succeeds in its motion-to-dismiss, it could force the SEC to reconsider its stance and potentially settle with Ripple. However, if Coinbase fails, Ripple may face an uphill battle in avoiding a substantial fine.
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