The SEC has filed a response summary of remedies in its ongoing legal battle with Ripple Labs, accompanied by supporting exhibits. This filing represents a pivotal moment in the lawsuit as it stands Final summary Before Judge Torres issues his ruling on remedies.
The SEC provides a final summary as decision day approaches for Ripple
Pro-XRP lawyer Bill Morgan provided a comprehensive explanation Separation From the SEC's final summary via X, highlighting the nuances of the legal arguments and the potential ramifications for Ripple and its operations. One major point of contention remains the issue of financial harm to institutional buyers of XRP.
The SEC asserts that financial harm should include not only direct losses, but also lost opportunities for greater profits due to less favorable terms in purchasing XRP. “The SEC’s summary of the response does not add anything new to the argument for financial harm,” Morgan noted. He added, skepticism about the possibility of reflux, saying: “I don’t think there will be an emptying order, but the outcome is not clear.”
Additionally, the SEC's response summary strongly calls for a permanent injunction that would restrict Ripple's future sales of XRP, particularly to on-demand liquidity (ODL) customers. According to Morgan, “The SEC says an injunction should be issued because Ripple’s business is currently almost exclusively selling XRP to institutions.”
Furthermore, the SEC asserts that Ripple has abandoned several of the defenses it previously claimed, such as over-territorialization of its sales to accredited investors, particularly with respect to institutional transactions. This, according to the SEC, indicates a strategic retreat for Ripple in the face of unfavorable analysis and legal precedents.
In response to the SEC filing, Stuart Alderotti, Ripple's chief legal officer, voiced strong opposition, criticizing the SEC for its approach: “More of the same from the SEC — failing to faithfully enforce the law and trying to fool the judge.” “. Eyes.” He continued: “The good news is that we are closer than ever to putting this lawsuit behind us, although unfortunately many are just beginning the journey. We are confident that the court will handle the redress phase fairly.”
Alderotti also sharply criticized the SEC's deference to international regulatory frameworks: “And just when you think the SEC can't go any lower, if you're a financial regulator outside the United States and you do the hard work of creating a comprehensive cryptocurrency license, you… Know that the SEC doesn't respect you and thinks you're handing out the equivalent of fishing licenses.
More of the same from the SEC – failing to apply the law faithfully and trying to fool the judge. The good news is that we are closer than ever to putting this lawsuit behind us, although unfortunately for many, we are just beginning the journey. We trust the court… https://t.co/JGhxAtOuk1
– Stuart Alderoty (@s_alderoty) May 7, 2024
Financially, the risks are high. The SEC is seeking fines and penalties that could total about $2 billion, highlighting the seriousness of the alleged regulatory violations. In the face of this, Ripple proposed a maximum penalty of just $10 million, arguing that the SEC's demands were disproportionately high compared to penalties imposed in similar cases.
Ripple asserts that it has made significant changes to its institutional selling practices for XRP to prevent future violations, signaling its willingness to comply with regulatory standards while challenging what it sees as overly punitive measures. Furthermore, the company says it has not caused financial losses to institutional investors.
At press time, XRP was trading at $0.5218.
Featured image from Shutterstock, chart from TradingView.com
