Ripple v SEC Lawsuit Update July 8th
TL;DR
- The Ripple vs. SEC lawsuit, ongoing since December 2020, focuses on alleged unregistered securities offerings via XRP sales, with disputes over penalties now proposed at $102.6 million.
- Predictions suggest a resolution by July 31 with a potential $25 million penalty, but the case’s complexity and appeals may prolong it, affecting XRP’s price.
What’s New?
The legal spat between Ripple and the US Securities and Exchange Commission (SEC) has been ongoing since December 2020. It is centered on accusations that the company and some of its executives conducted unregistered securities offerings by selling XRP tokens. Even though the case reached its trial phase in April of this year, a resolution has yet to be announced.
One major issue that seems to prolong the lawsuit is the size of Ripple’s potential penalty. The SEC initially sought a staggering $2 billion fine on the company, while the latter insisted on a sum no larger than $10 million. Several weeks ago, the regulator softened its tone, proposing a $102.6 million penalty.
At the end of June, Judge Amy Jackson dismissed the SEC’s claims that secondary market sales of Binance’s BNB token constituted securities transactions. The ruling caught the eye of Ripple, which intended to use it in its favor. Specifically, it filed a Notice of Supplemental Authority, arguing that the decision supports its case that the alleged illegal sales of XRP do not warrant “harsh remedies” (as the agency claims).
The Commission was quick to react, filing an official response on July 3. It argued that the case against Binance is “wholly irrelevant” to the one against Ripple:
“Ripple highlights one observation in the nearly 90 pages of the Binance ruling and tries to extrapolate from that general observation about the efficiency of the SEC’s litigation strategy The Court’s observations on a motion to dismiss about the SEC’s actions say nothing at all about Ripple’s conduct or the remedies that are proper for the violations this Court found.”
Is It Time for an Outcome?
The complexity of the legal process and possible appeals from both sides may prolong the lawsuit indefinitely. However, some optimists believe an official end might occur as early as this month.
One example is the American attorney Fred Rispoli, who outlined July 31 as a possible date. He also predicted the outcome would include a penalty of no more than $25 million for the company 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 added.
The eventual resolution of the lengthy court battle is expected to trigger huge volatility for XRP’s price. Recall that the asset’s valuation soared substantially after each of Ripple’s partial wins last year. Those curious to learn more about the case and its possible impact on the token, feel free to take a look at our dedicated video below:
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