Ripple v. SEC Lawsuit Update June 20th: The Recent Important Developments
TL;DR
- The legal battle continues with the resignation of SEC’s Chief of Crypto Asset and Cyber Unit, David Hirsh, as the trial phase progresses.
- The regulator reduced its proposed fine from $2 billion to $102.6 million, while Ripple insists on a maximum of $10 million.
What’s New?
The longstanding legal battle between Ripple and the US Securities and Exchange Commission (SEC) continues to offer additional updates instead of an outcome. Most recently, the regulator lost its Chief of the Crypto Asset and Cyber Unit in the Division of Enforcement – David Hirsh – who resigned after spending almost a decade with the agency.
Some reports speculated that he would replace the SEC with pump.fun (a Solana-based marketplace that enables users to create and distribute their own tokens). However, Hirsh labeled the rumors “false.”
The resignation comes at a pivotal time since the lawsuit has already entered its trial phase. Both parties handed necessary data and abided by court rules in the past few months and according to some industry experts now await for the judge’s ruling. One person who shares that thesis is the American lawyer Jeremy Hogan.
Ripple’s Possible Fine
The size of Ripple’s possible penalty has become the bone of contention between the two entities. Initially, the SEC sought a whopping $2 billion fine on the company, alleging it of conducting an unregistered securities offering by selling its XRP token.
Ripple did not welcome the idea with open arms, giving several reasons why the amount should not exceed $10 million. It pointed to the case between the SEC and Terraform Labs, reminding that the defunct crypto firm agreed to pay a $420 civil penalty for its fraudulent actions. The company also added that there are no direct allegations of fraud in its lawsuit against the watchdog.
Shortly after, the SEC softened its tone, proposing a $102.6 million fine:
“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.”
The resolution of the legal spat may trigger significant volatility for XRP’s price, with some analysts expecting a bull run in the event of a decisive Ripple victory. Those curious to learn more about the case and its possible impact on the token, please check our dedicated video below:
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