The US SEC petitions Judge Analisa Torres to render a final judgment and nearly $2 million in penalties against Ripple in an XRP lawsuit.
Ripple Labs’ violations of securities laws are brought to the federal court’s attention by the U.S. Securities and Exchange Commission (SEC), which also requests that the judge render a final judgment against Ripple.
This includes nearly $2 billion in civil penalties, permanent injunctions, disgorgement and prejudgment interest, and as previously reported.
Ripple executives and the cryptocurrency community criticized the SEC for making irrational claims in the remedies-related brief and other documents. The absence of any accusations of fraud or irresponsibility is merely an attempt to sabotage the bull market and punish Ripple.
US SEC Seeks Final Judgment in Remedies-Related Brief
The court received the remedies-related brief in its public form subsequent to the removal of redactions. The arguments predominantly center around alleged infringements of Section 5 of the Securities Act of 1933 and the execution of unregistered institutional sales of XRP.
Based on the summary judgment order issued by Judge Analisa Torres on July 13, the SEC has not alleged any fraudulent activity and is instead focusing on the expansion of Ripple, notwithstanding the lawsuit.
The SEC requests that Judge Analisa Torres grant its proposed order and compel Ripple to make a disgorgement payment of $876,308,712. Moreover, the lawsuit demands prejudgment interest amounting to $198,150,940 and a civil penalty of $876,308,712.
The SEC asserts that the majority of Ripple’s post-complaint XRP sales were to institutions and that the sales were detrimental to investors because Ripple neglected to disclose discounts to institutional investors. Furthermore, the SEC asserts that Ripple continues violating regulations, distorting the ruling, and deliberately evading the securities law.
Ripple CEO And CLO Critique The SEC
The $2 billion sanction is illogical, according to Ripple CEO Brad Garlinghouse, because “there are no allegations (let alone findings) of fraud or recklessness.” “No precedent exists for this.” Conversely, Garlinghouse emphasizes the SEC’s flagrant misuse of authority in the DEBT Box case and its lack of adherence to legal principles in the Ripple case.
The Ripple CLO Stuart Alderoty stated that rather than applying the law, the SEC only punishes and intimidates Ripple and the entire industry.
“Our response will be filed next month, but as we all have seen time and again, this is a regulator that trades in statements that are false, mischaracterized and designed to mislead. They stayed true to form here.”
The SEC will file its response to the opposition filed by Ripple with the court on May 6, in accordance with the extended deadlines approved by Judge Torres (April 22 and May 6, respectively).
XRP Price Position
The XRP Price Remains Stable Pro-XRP attorneys assert that the brief regarding remedies contained nothing beyond what was anticipated. However, attorneys expressed some apprehensions concerning the transactions and negotiations of ODL.
Since the lawsuit was directed at ODL customers, attorneys Bill Morgan and James Farrell stated that Judge Torres placed ODL sales in category one alongside other sales to institutions and Ripple sales. Barring a change in Ripple’s business practices by the ruling in Torres, attorneys fear the SEC will gain the upper hand.
Fred Rispoli thinks that Ripple will be affected by the motion. However, he believes the court will provide sufficient time for the parties to negotiate the fines and penalties. Alternatively, the magistrate may determine whether the restructured sales benefit Ripple.
In contrast, the price of XRP has increased by 3% beyond $0.651 over the past twenty-four hours. At $0.627 and $0.659, the 24-hour low and high, respectively, are recorded. Furthermore, trading volume has increased by 70% in the last 24 hours, indicating a rise in interest among traders after positive reactions from Ripple executives.