- The ongoing legal battle between Ripple and the US SEC has now reached a pivotal trial phase.
- Ripple refutes the SEC’s $2 billion penalty proposal, advocating for a significantly lower fine.
- Ripple’s CEO foresees a possible resolution by summer 2024, though procedural delays may occur.
Discover the latest developments in the Ripple-SEC lawsuit, including potential penalties and future outlook.
Ripple Challenges the SEC Penalty
For over three years, Ripple has been embroiled in a contentious legal dispute with the US Securities and Exchange Commission (SEC). The core issue of the lawsuit involves allegations that Ripple conducted an unregistered securities offering by selling XRP tokens.
Earlier this year, the SEC proposed a staggering $2 billion fine against Ripple for these alleged violations. Ripple’s chief legal officer, Stuart Alderoty, argued that the penalty should be capped at $10 million. The company’s legal team recently reinforced this position, drawing comparisons with the penalties in the case of Terraform Labs, which agreed to pay $4.47 billion for fraudulent activities, including $3.6 billion in disgorgement, $466 million in prejudgment interest, and a $420 million civil penalty.
Ripple’s attorneys pointed out that the SEC has previously recommended civil penalties ranging from 0.6% to 1.8% of a defendant’s gross revenue, a pattern they believe also applies to Ripple. Consequently, they insist that an “appropriate” fine should be no more than $10 million. Furthermore, they highlighted the significant differences between Ripple’s case and that of Terraform Labs, noting that there are no direct fraud allegations against Ripple.
Potential Resolution Timeline
Given the complexities of the legal proceedings, the Ripple vs. SEC lawsuit could continue for years, with potential delays and appeals on the horizon. However, Ripple’s CEO, Brad Garlinghouse, remains optimistic about a nearer resolution, projecting that the matter could be settled by the end of the summer of 2024.
“My estimation is sometime before the end of the summer. Somebody asked me about the end of August, but I pointed out that September 21 is the end of the summer,” he recently stated.
Adding weight to this optimistic timeline, American lawyer Jeremy Hogan suggested the possibility of a $100 million settlement:
“I’m saying that the Judge will order 0 disgorgement but throws the SEC a bone and orders Ripple to pay a $100 million penalty.”
Supporters of Ripple anticipate a positive outcome, especially in light of the company’s three partial court victories in 2023 that positively impacted XRP’s market value. Each legal win for Ripple has historically led to a rise in XRP’s price, indicating that a final favorable ruling could significantly boost the cryptocurrency’s market performance.
Conclusion
The ongoing Ripple vs. SEC lawsuit holds significant implications for both the cryptocurrency market and regulatory landscape. While Ripple contests the severity of the SEC’s proposed penalties, the potential for a resolution by summer 2024 offers a glimpse of light at the end of the tunnel. Market participants remain watchful, as the lawsuit’s outcome could substantially influence XRP’s future trajectory and broader regulatory practices.
