- The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) continues to make headlines as it progresses through its trial phase.
- Key recent developments include a significant reduction in the SEC’s demand for financial penalties.
- This case highlights broader implications for the cryptocurrency sector, drawing substantial attention from industry leaders and regulatory bodies.
Explore the latest updates in the high-stakes Ripple vs. SEC case and their potential impact on the crypto industry.
Key Developments in the Ripple vs. SEC Lawsuit
In a notable recent turn, the SEC has decreased its proposed penalty from an original $2 billion to a revised $102.6 million. This decision marks a significant shift in the ongoing legal proceedings. The SEC’s basis for this reduction was articulated as follows:
“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.”
On the other hand, Ripple’s legal team is advocating for a much lower penalty, capping it at $10 million.
Additionally, the SEC’s Crypto Asset and Cyber Unit saw the resignation of its Chief, David Hirsh, adding another layer of complexity to the case.
Broader Legal Challenges for Ripple
Ripple is concurrently dealing with another legal issue in California, where CEO Brad Garlinghouse is named in a civil lawsuit. There has been a noteworthy development here as well, with Ripple’s chief lawyer reporting:
The CA judge dismissed all allegations suggesting that Ripple violated federal securities law. The NY ruling that XRP is not a security stands undisturbed.
Criticism of SEC Leadership
In recent public statements, both Ripple’s legal chief, Stuart Alderoty, and CEO, Brad Garlinghouse, have expressed strong disapproval of the SEC’s Chairman, Gary Gensler. Garlinghouse, speaking critically about Gensler’s approach to the crypto sector, remarked:
This is a field where the leading lights from a couple of years ago are either in jail, about to go to jail, or awaiting extradition.
Garlinghouse countered:
Absolute nonsense coming from Gary Gensler today. And this slender about “all crypto execs going to jail” from the man who completely missed FTX and actually cozied up to SBF and wasn’t even invited to the DOJ announcement about Binance. If he was really “working for the American people” as he says, he would have been fired a long time ago. Gensler will cause Biden to lose the election.
Alderoty also shared a pointed critique towards Gensler’s recent assertions:
Note to Gary Gensler: The courts aren’t “adjusting”… they are finding that you are breaking the law by exceeding your statutory authority.
— Stuart Alderoty (@s_alderoty) June 26, 2024
Conclusion
The Ripple vs. SEC case continues to unfold with new developments altering the landscape of the trial. With substantial financial stakes and significant legal implications, the outcome of this case could set a precedent for the regulatory treatment of cryptocurrencies. As proceedings advance, both the crypto industry and regulatory frameworks may experience noteworthy shifts.
