Bitcoin
SEC files final response in XRP lawsuit, rejects Ripple’s claims
The United States Securities and Exchange Commission (SEC) has filed its final response to the ongoing lawsuit against Ripple.
According to archivingthe commission refuted Ripple’s claims that it acted without recklessness in handling the cryptocurrency XRP.
The regulator pointed out that the court had previously rejected Ripple’s “fair notice” defense, despite the company’s claim that there is no “widespread uncertainty” regarding XRP’s legal status.
Additionally, the SEC drew attention to Ripple’s attempts to minimize its liability, highlighting its cooperation with regulatory authorities since XRP’s initial coin offering in 2013. However, the regulator argued that Ripple’s compliance did not eliminates the possibility of future violations.
The filing further added that Ripple’s claims of restructuring future XRP sales and adhering to legal advice are misleading and do not accurately reflect court orders. It stated that Ripple misinterpreted these orders and underestimated their enforcement implications.
The SEC also rejected Ripple’s defenses regarding XRP sales outside the US and to accredited investors. The commission noted that these arguments were not sustained during summary judgment.
Furthermore, the commission rejected Ripple’s adjustments to contracts for on-demand liquidity sales, noting that these revised contracts still lack the necessary restrictions and therefore continue to pose legal risks.
Ultimately, the SEC maintains that despite Ripple’s assurances and the absence of recent breaches, the potential for future breaches exists. As such, it argues that this possibility justifies the need for injunctions to ensure Ripple’s compliance in the future.
The agency’s response was not well-received by the crypto community, with Ripple’s chief legal officer, Stuart Alderoty, criticizing your approach.
According to Alderoty, the SEC’s actions would be intriguing to other financial regulators who established or are working on creating a regulatory framework for the crypto sector.
“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,” he wrote.
On April 23, Ripple challenged the SEC’s $1.95 billion fine imposed for institutional sales of XRP. The regulator proposed $876 million in restitution, $198 million in prejudgment interest and a civil penalty of $876 million.
However, Ripple claimed that the civil fine cannot exceed $10 million.