Ripple Vs. SEC Update: Is The Lawsuit Finally Coming To An End With A Settlement?
23 Abril 2024 - 8:00AM
NEWSBTC
The legal battle between Ripple and the Securities and Exchange
Commission (SEC) is getting heated and, following recent
developments, looks far from over. This is due to the disagreement
between both parties on the appropriate remedy for Ripple’s
violation of securities laws. Ripple Proposes $10 Million
Fine Instead In opposition to the SEC’s motion for remedies and
entry of final judgment, Ripple has proposed that the court should
not impose a civil penalty of not more than $10 million. This
figure represents a far cry from the SEC’s proposed judgment. The
Commission had earlier asked the court to order Ripple to pay the
sum of $1,950,768,364 as a pecuniary fine for violations relating
to its institutional XRP sales. Related Reading: Crypto Analyst
Predicts Cardano Recovery After ABC Wave Completion, Here’s The
Target Specifically, the SEC proposed that Ripple pay a civil
penalty of $876,308,712 alongside a prejudgment interest of
$198,150,940 and disgorgement of $876,308,712, which represents the
profits from its violation of the Securities Act. However, Ripple
asked the court to deny the requests for disgorgement and
pre-judgment interest and only focus on the civil penalty, which
shouldn’t be more than $10 million. Ripple’s lawyers also
laid out arguments as to why the civil penalty should not exceed
$10 million. Firstly, they stated that the first tier of the
statutory maximum penalties is what applies to this case “because
the SEC has never alleged fraud, deceit, or manipulation and has
failed in its belated attempt to show that Ripple recklessly
disregarded the law.” Therefore, Ripple argued that the
Commission’s request for a civil penalty of over $876 million isn’t
the appropriate remedy for the first-tier structure. They added
that the company’s revenue from pre-complaint institutional sales
should be the only earnings considered when deciding on a remedy,
which makes a civil penalty of not more than $10 million more
appropriate. Accounting Error From The SEC Ripple suggested
that the SEC made an error in calculating the company’s earnings
while deciding on the right amount for which the crypto firm should
be fined. According to the company’s lawyers, the Commission failed
to “analyze or even consider any other categories of Ripple’s
expenses.” Meanwhile, they allege that the SEC didn’t offer any
evidence or explanation “for why cost if revenue is the only
category of Ripple’s deductible expenses.” Simply put, Ripple
argues that the regulator, while calculating Ripple’s earnings,
didn’t consider how much the company expended before deciding that
almost $2 billion was an appropriate fine. Ripple’s lawyers
made this argument while stating that the SEC also erred in relying
on the declaration of Andrea Fox, an accountant at the agency. They
claim that the SEC never disclosed Fox as a fact or expert witness
and that she wasn’t deposed during the initial discovery or
supplemental remedies discovery. Therefore, they moved to strike
her declaration as an “untimely disclosed expert report.” Ripple
Also Opposes SEC’s Proposed Injunction As part of its entry for
final judgment, the SEC had asked the court to “permanently”
restrain and enjoin Ripple from “directly or indirectly conducting
an unregistered offering of Institutional Sales.” Understanding how
this could affect their ODL transactions, Ripple has asked the
court to deny the request for an injunction. Related Reading:
3 Major Metrics To Watch Out For That Can Impact Ethereum Prices
The crypto firm argues that the Commission has failed to show why
an injunction is warranted. Injunctions are usually granted when
there is a fear of future violations. Ripple claims that the SEC
has failed to show a “reasonable likelihood of future
violations.” The crypto firm’s lawyers further revealed that
Ripple has “changed the way it sells XRP and changed its contracts
to avoid any future violations.” To show good faith, they submitted
a declaration by Ripple’s President, Monica Long, which describes
the steps the company has taken to avoid future violations.
XRP price recovers above $0.54 | Source: XRPUSDT on Tradingview.com
Featured image from Coinpedia, chart from Tradingview.com
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