Thursday Newsletter

Explore the latest trends, gain valuable insights, and stay informed in the dynamic cryptocurrency ecosystem.

09 May 2024

Ripple Labs and the United States Securities and Exchange Commission (SEC) continue to make headway in their ongoing legal dispute, as the SEC submits its final response in the remedies stage of the Ripple XRP case.

In its recent filing, the SEC challenges Ripple’s stance, stating that the blockchain company cannot avoid injunctions that would prevent future violations. This comes despite Ripple arguing that there should be no “widespread uncertainty” about the legal status of XRP.

Ripple’s fair notice defense was previously dismissed by the court, yet the SEC still believes that Ripple may repeat past actions in the future. Even though Ripple has adhered to regulations since the XRP lawsuit began in 2020, the SEC argues that further breaches remain possible.

The SEC’s brief highlights that Ripple may be trying to downplay its liability while emphasizing its collaboration with the SEC since the 2013 initial coin offering (ICO) of XRP. The SEC insists that Ripple’s post-lawsuit assurances about future compliance and restructuring sales are not sufficient to avoid injunctions.

Ripple’s claim of making sales outside the U.S. and to accredited investors was also refuted by the SEC, who stated that these defenses were previously abandoned during the summary judgment phase.

The SEC remains firm that Ripple’s changes in sales contracts, particularly for on-demand liquidity sales, do not alleviate the risk of future violations.

Ripple’s chief legal officer, Stuart Alderoty, expressed dissatisfaction with the SEC’s approach, saying the agency’s reputation continues to falter. Alderoty noted that the SEC’s perspective may not align with international financial regulators that have established comprehensive crypto licensing frameworks.

While Ripple is hopeful for a favorable outcome in the lawsuit, the crypto community is keenly watching the case, with analysts predicting a final judgment around September.

In the meantime, Ripple has plans to launch XRPL enterprise solutions in Japan through a partnership with Tokyo-based consulting firm HashKey DX.