- The U.S. SEC is expected to submit a reply brief by May 6 in response to Ripple’s opposition to the regulator’s proposed $2 billion penalty.
- The penalty is a result of the July 2023 victory judgment, where the court ruled that Ripple violated federal securities laws by selling XRP to institutions.
- Ripple has presented compelling legal arguments opposing the SEC’s claims, stating that the XRP sales conducted after the complaint were to accredited investors and were facilitated through ODL transactions.
The SEC is set to respond to Ripple’s opposition to a proposed $2 billion penalty, a development that could have significant implications for the future of XRP and the broader crypto market.
SEC’s Proposed Penalty Against Ripple
In March, the SEC proposed a hefty penalty of approximately $2 billion against Ripple. This came after a July 2023 victory judgment where the court ruled that Ripple had violated federal securities laws by selling XRP to institutions. The proposed penalty includes a civil penalty of $876.3 million, an additional $876.3 million in disgorgement, and prejudgment interest totaling $198.15 million.
Ripple’s Opposition to the SEC’s Claims
In its opposition brief, Ripple presented compelling legal arguments against the SEC’s claims. Ripple contended that the XRP sales conducted after the complaint were to accredited investors and were facilitated through ODL transactions. These sales, according to Ripple, are exempt from U.S. securities laws as they were carried out by Ripple’s Singapore branch, which is regulated by Singapore’s central bank. Ripple’s president, Monica Long, testified that even these ODL transactions resumed after the July 2023 judgment because Ripple had ceased XRP sales since the SEC filed the charges.
Anticipated SEC Response and Market Speculation
The SEC is expected to file its comment on Ripple’s opposition by Monday, May 6. Market pundits speculate that the SEC will likely persist in its pursuit of punitive disgorgement and injunction, restricting Ripple from engaging in further XRP institutional sales. On Monday, April 29, the SEC filed its opposition to Ripple’s motion to strike the SEC’s new expert materials. These filings are projected to be the final submission before Judge Analisa Torres decides on the penalty for selling XRP to institutional investors.
Conclusion
The upcoming SEC response to Ripple’s opposition is a significant event in the ongoing legal battle between the two entities. The outcome could have far-reaching implications for Ripple, XRP, and the broader crypto market. As the situation unfolds, investors and market watchers will be keenly observing the developments and their potential impact on the future of digital currencies.
