- The crypto community is eagerly awaiting a potentially pivotal development in the ongoing lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC).
- Investors are keenly anticipating the SEC’s response to the settlement, which is due today, and an edited version of it by Wednesday, May 8th.
- This could be the final court filing in the SEC vs. Ripple case, with the SEC’s response expected to arrive within the day.
Investors await a key development in the SEC vs. Ripple lawsuit, which could be a turning point for XRP and the broader crypto community.
SEC’s Response to Ripple’s Settlement
Following the submission of the response, Judge Analisa Torres will review and decide on the penalty for violating U.S. securities laws. In July 2023, Judge Torres ruled that Ripple violated Section 5 of the U.S. Securities Act by not registering XRP as a security in sales to institutional investors.
SEC’s Request for Damages
In the opening document regarding the legal resolution, the SEC requested the courts to order Ripple to pay a staggering compensation of $876,308,712, a precautionary interest of $198,150,940, and a penalty of $876,308,712. Notably, the SEC also asked the court to prohibit Ripple from selling XRP to institutional investors.
Ripple’s Counter-Argument
However, Ripple argued in its opposition brief regarding this legal resolution that a legal penalty should not exceed $10 million. Citing the three tiers of Section 20 (d) of the Securities Act, Ripple stated that this should be a first-tier case, as the SEC never accused Ripple of fraud, deception, or manipulation.
Ripple’s Opposition to SEC’s Penalty Request
On April 22, Ripple submitted its opposition brief regarding the U.S. Securities and Exchange Commission’s (SEC) request for approximately $2 billion in penalties in the lawsuit. The opposition brief also referred to the dismissal of accusations directed at Chris Larsen and Brad Garlinghouse about recklessly disregarding a regulatory environment.
Conclusion
Investors hoping for the court decision to end the SEC vs. Ripple saga may be in for a disappointment. The crypto community expects the SEC to also object to the decision on XRP’s Programmed Sale. In the July 2023 decision, Judge Analisa Torres ruled that XRP’s programmed sales did not meet the third condition of the Howey Test. The SEC must wait until the end of the lawsuit it filed against Ripple to object to court decisions. However, the SEC indicated its intention by filing a provisional appeal in August 2023. The court rejected this request in October 2023, forcing the SEC to wait until the court decides on the penalties for Ripple’s violation of U.S. securities laws.
