SEC and Ripple Face Off in Ongoing Legal Battle Over XRP
Summary:
The U.S. Securities and Exchange Commission (SEC) and Ripple Labs proceed in their legal tussle over the digital currency XRP. The SEC disputes Ripple's claims of operating without recklessness and questions its legal clarity. It also presumes potential future violations. Ripple's assertions of regulatory compliance and restructuring future XRP sales are labeled as misleading by the SEC. The regulator also refutes Ripple's claims on external sales and criticizes Ripple's understanding of legal compliance. Stuart Alderoty, Ripple’s Chief Legal Officer, responds, expressing hope for a resolution and criticizing the SEC's inconsistent law application. Ripple plans to launch XRPL business solutions in Japan through a partnership with HashKey DX.
The legal dispute between blockchain firm Ripple Labs and the U.S. Securities and Exchange Commission (SEC) proceeds apace, with the SEC pressing its advantage by submitting its final answer in the ongoing remedy phase of the lawsuit. The regulator has refuted Ripple's claims that it operated without negligence and that the legal status of the digital currency XRP is clear, even with prior court dismissal of Ripple's 'fair notice' defence. The SEC continues to question whether Ripple will engage in similar conduct in the future, despite no infractions since the lawsuit's initiation in 2020. Ripple's attempts to minimize its responsibility for the 2013 XRP ICO while stressing its ongoing collaboration with the SEC were also called out by the regulator in the remedies brief. Drawing from its understanding of legal provisions, the SEC believes that inadvertent breaches by Ripple cannot be ruled out, despite the company not breaching any since 2020. Notably, the regulator disagrees with Ripple's claims of having brought changes to its conduct in line with the lawsuit and feels that the blockchain company has misinterpreted the lawsuit’s orders, diminishing its impact on future compliance. The regulator disputes Ripple's assertions on conducting sales outside of U.S jurisdiction or to certified investors as these defenses were dropped during the summary judgment phase. Ripple's claims about altering contractual obligations for on-demand liquidity sales have also been disregarded, as these contracts lacked certain violative constraints. It is the SEC's contention that despite Ripple's numerous assertions, there is still a necessity for injunctions to prevent future violations. Ripple’s legal team, led by Stuart Alderoty, responded to the SEC’s reply, stating that the regulator’s prestige continues to nosedive. Alderoty points out that international financial regulatory bodies with comprehensive cryptocurrency licensing structures may be puzzled at the SEC's dismissive attitude, comparing their efforts to granting permits for fishing. Alderoty censured the SEC’s unvarying application of law and expressed hope towards resolving the XRP lawsuit. The cryptocurrency community is keen on the lawsuit's resolution, with expectations of a final ruling coming in around September. Meanwhile, Ripple intends to debut XRPL business solutions in Japan via a strategic collaboration with Tokyo-based consulting entity HashKey DX.
Published At
5/8/2024 10:30:09 AM
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