Varinder Singh
The U.S. Securities Exchange Commission (SEC) reminds the federal court about violations of securities laws by Ripple Labs and asks the judge to grant a final judgment against Ripple. This includes permanent injunctions, disgorgement and prejudgment interest, and civil penalties of nearly $2 billion, as reported earlier by CoinGape.
Ripple executives and the crypto community criticized the SEC for irrational statements in the remedies-related brief and other documents. No allegations of fraud or recklessness are just a move to punish Ripple and sabotage the bull market.
US SEC Seeks Final Judgment in Remedies-Related Brief
The public version of the SEC’s remedies-related brief was filed in the court after redactions. The arguments are primarily based on violations of Section 5 of the Securities Act of 1933 and conducting unregistered offerings of XRP in institutional sales. The argument is based on Judge Analisa Torres’ summary judgment order last July 13, which means the SEC has not argued any fraud and simply targeting the growth of Ripple despite a lawsuit.
The SEC wants Judge Analisa Torres to grant a proposed order in its favor and force Ripple to pay $876,308,712 in disgorgement. Additionally, it seeks $198,150,940 in prejudgment interest and $876,308,712 civil penalty.
The SEC claims Ripple’s post-complaint XRP sales are mostly to institutions and the sales harmed investors as the company even failed to disclose discounts to institutional investors. Moreover, the SEC argues Ripple continues to defy laws, mischaracterize the ruling, and evade the securities law intentionally.
Ripple CEO and CLO Blast the SEC
Ripple CEO Brad Garlinghouse said the $2 billion penalty is illogical based on “no allegations (let alone findings) of fraud or recklessness. There is absolutely no precedent for this.” Instead, Garlinghouse highlights the SEC’s gross abuse of the power in DEBT Box case and acting without faithful allegiance to the law in Ripple case.
Ripple CLO Stuart Alderoty stated that the SEC seems to only punish and intimidate Ripple and the whole industry rather than applying the law.
“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.”
Ripple will submit its opposition to the court on April 22 and the SEC will file its reply on May 6, as per extended dates approved by Judge Torres.
XRP Price Stays Strong
Pro-XRP lawyers assert the remedies-related brief had nothing more of what was expected. However, lawyers raised some concerns regarding ODL sales and negotiations.
Lawyers Bill Morgan and James Farrell said Judge Torres classed ODL sales into category 1 with other sales to institutions and Ripple sales since the lawsuit were to ODL customers. Lawyers hope Ripple changed its business practices as per Torres ruling, otherwise, the SEC will gain an upperhand.
Fred Rispoli believes the motion has consequences for Ripple. But thinks the court will offer parties enough time to negotiate on the penalties and fines. Or else, the judge will decide on newly-structured sales are favorable enough to Ripple.
Meanwhile, XRP price trades 3% higher over $0.651 in the last 24 hours. The 24-hour low and high are $0.627 and $0.659. 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.
Also Read: Grayscale CLO Explains Why Their Case of Spot Ethereum ETF Is Strong
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