Ripple’s Legal Battle with the SEC Nears Final Arguments, Expected Outcome in September
The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) since 2020 has reached a critical moment, as the SEC has submitted its final defense in the remedial phase of the lawsuit. This is sure to set a milestone for cryptocurrency regulation.
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SEC Challenges Ripple’s Defense
SEC: Ripple has not reoffended, but it does not mean it will not in the future
Questioning Ripple’s strategy, to no avail
SEC still argues for enforcement
Ripple Responds to SEC’s Criticism: Self-Destruction of Reputation
Final Judgment in September
The SEC recently made a strong response to Ripple’s supplemental briefing. In the briefing, Ripple claims that its handling of XRP was not reckless, a claim strongly refuted by the SEC. Despite the blockchain startup’s attempt to refute the “fair notice” concept, which was previously rejected by the court, the SEC still insists on the ongoing legal ambiguity regarding the legal status of XRP.
According to the SEC, although Ripple has not committed any violations since the lawsuit began, the possibility of future violations still exists. The SEC criticized Ripple for attempting to minimize its responsibility while boasting about its cooperation with regulatory agencies since the initial issuance of XRP tokens in 2013. Ripple’s claim to restructure future XRP sales to comply with legal guidance was deemed misleading by the SEC, indicating that Ripple misunderstands the court’s orders and compliance requirements.
SEC’s defense also raised questions about Ripple’s sales strategies, particularly its claims about conducting sales outside of the United States and sales to qualified investors. These defenses have clearly been abandoned during the summary judgment phase.
Furthermore, the SEC rejected Ripple’s argument for contract adjustments regarding on-demand liquidity sales, deeming these contracts still in violation of certain provisions.
The SEC’s filing argues for an injunction against Ripple to prevent future legal violations, countering Ripple’s optimistic attitude towards its compliance and restructuring efforts. The regulatory agency is skeptical about whether Ripple can fully comply with established legal standards.
In contrast, Ripple’s General Counsel Stuart Alderoty criticized the SEC’s actions, believing that it damaged the SEC’s reputation among international regulatory bodies with more developed cryptocurrency frameworks. Alderoty still holds hope for a resolution favorable to Ripple.
As Ripple prepares to expand its business in Japan through a partnership with HashKey DX, the cryptocurrency community is holding its breath, expecting a final judgment to be made around September. This case not only affects Ripple and XRP but also sets a precedent for the handling of cryptocurrencies under U.S. securities law.
Ripple
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