Ripple v SEC Lawsuit Update July 11

The NFT Unicorn RippleSEC_CB-31 Ripple v SEC Lawsuit Update July 11 Crypto News

TL;DR

  • Ripple has achieved significant partial legal victories in its ongoing battle with the SEC throughout 2023.
  • The potential penalty remains disputed, with the SEC proposing $102.6 million and the company arguing for a maximum of $10 million.

Filing After Filing

The legal spat between Ripple and the US Securities and Exchange Commission (SEC) continues to be among the most intriguing topics in the crypto space. It dates back to December 2020 when the regulator sued the company, accusing it of illegally raising more than $1.3 billion in an unregistered securities offering by selling XRP.

The parties fired numerous shots at each other in the following years, with the advantage going from one side to the other. According to some industry participants, Ripple currently has the upper hand after securing three vital (yet partial) court wins.

In July last year, Judge Torres ruled that the firm’s programmatic sales to secondary trading platforms do not constitute offers of investment contracts. The decision was followed by a bull run for XRP, whose price shot by over 70% in the span of 24 hours.

The magistrates later dismissed the SEC’s intentions to appeal the ruling, while Ripple’s CEO Brad Garlinghouse and Executive Chairman Chris Larsen were cleared of all charges brought by the agency.

The case entered its trial phase in April this year, but instead of a final agreement, it offered additional confrontation. Ripple recently pointed to Judge Amy Jackson’s decision to dismiss the SEC’s claims that secondary market sales of Binance’s BNB token constituted securities transactions.

The company’s defense filed a Notice of Supplemental Authority, arguing that the ruling supports its case that the alleged illegal sales of XRP do not warrant “harsh remedies.”

The Commission was quick to reactfiling an official response on July 3. It maintained that the case against Binance is “wholly irrelevant” to the one against Ripple.

The Possible Penalty

Ripple’s potential fine has become another bone of contention in the lawsuit. The SEC initially sought a staggering $2 billion penalty, while the company insisted on a sum no larger than $10 million.

Ripple compared the lawsuit with the one between the watchdog and Terraform Labs, saying direct allegations of fraud were only evident in the one against the defunct crypto company. 

Shortly after, the SEC softened its tone, proposing a $102.6 million penalty:

“Ripple avoids comparing the Terraform settlement’s penalty to the gross profit of the violative conduct. That ratio ($420 million/$3.587 billion) is significantly higher: 11.7%. Applying it to the $876.3 million in gross profits, the SEC here asks the court to disgorge, which results in a much larger figure, a $102.6 million penalty, than the $10 million ceiling Ripple insists on.”

Is a Resolution Incoming?

Even though the case is in its final stage, an outcome might be prolonged indefinitely due to the complexity of the legal process and possible appeals from both sides. 

However, some optimists believe an agreement might occur in the following weeks. One example is the American attorney Fred Rispoli. He outlined July 31 as a possible date, predicting the resolution would include a penalty of no more than $25 million for Ripple and $0 disgorgement.

“Judge rules all sales she deemed illegal are permanently enjoined, and rules all the “new” contracts referenced by Ripple are not properly before her, so SEC will have to sue again if it believes these violate her ruling,” the lawyer envisioned.

SPECIAL OFFER (Sponsored)

Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).

LIMITED OFFER 2024 at BYDFi Exchange: Up to $2,888 welcome reward, use this link to register and open a 100 USDT-M position for free!

Source: CryptoPotato