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Ripple v. SEC case update as of May 10, 2024

Ripple v. SEC case update as of May 10, 2024

With the cryptocurrency community still at the edge of its seat, waiting for the closure of the protracted courtroom battle between Ripple and the United States Securities and Exchange Commission (SEC), the regulator has filed its remedies reply brief and supporting exhibits.

Specifically, the SEC has recently filed its public, redacted version of the remedies reply brief and supporting exhibits shortly after filing them under seal, according to the court documents shared by a defense attorney and former federal prosecutor, James K. Filan, in an X post on May 8.

SEC’s brief details

Among other things, the agency’s brief states that Ripple’s claims that it did not act recklessly were “contrary to evidence,” as well as that its additional arguments were “unavailing,” therefore arguing for the necessity of the requested injunctions. According to the SEC:

“Ripple argues the Court ‘should also take into account the SEC’s own conduct,’ and that because the SEC supposedly ‘knew of Ripple’s activities no later than October 2013,’ this also counsels against injunctive relief. (…) Ripple’s contentions are meritless.”

Indeed, the regulator has accused Ripple of planning “to issue a new unregistered crypto asset,” referring to the company’s announcement on April 4, 2024, of the planned dollar-pegged stablecoin release, as one of the proofs of its continuous violations.

Finally, the SEC has tried to rebuke the blockchain company’s opposition to its demand to pay the $2 billion in damages over its XRP sales to institutional buyers, which Judge Analisa Torres ruled were securities sales, as opposed to retail purchases. In particular:

“Ripple insists on a ‘low’ penalty—under $10 million. But it fails to explain how that negligible ‘low’ penalty would meaningfully punish its violations or deter it or others from future large-scale capital raises without required registration.”

Ripple SEC case comments

Commenting on the recent developments, Ripple’s chief legal officer, Stuart Alderoty, shared his disappointment with the SEC’s practices in the case, accusing the securities watchdog of “trying to pull the wool over the Judge’s eyes” but also stressing that:

“The good news is that we are closer than ever to putting this lawsuit behind us, though, unfortunately, many are just starting the journey. We trust the Court will approach the remedies phase fairly.” 

On top of that, Alderoty criticized the SEC’s argument that compares the blockchain company possessing crypto licenses from different jurisdictions to that of a New York restaurant not requiring a liquor license because it has obtained a fishing license in California and stated that:

“And just when you think the SEC can’t sink any lower if you are a financial regulator outside the US and have done the hard work of establishing comprehensive crypto licensing frameworks, know that the SEC has no respect for you and thinks you are handing out the equivalent of fishing licenses.”

Elsewhere, XRP, the token that has been at the center of the long-running Ripple v. SEC legal standoff, was at press time trading at the price of $0.51, recording a 0.37% decline in the last 24 hours, dropping 2.17% across the previous seven days and adding up to the 15.17% loss on its monthly chart, as per data on May 10.

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