The ongoing legal battle between Ripple Labs and the United States Securities and Exchange Commission (SEC) has reached a crucial phase with the SEC filing its final reply in the lawsuit’s remedies stage. This marks a significant development in the case, which has been closely watched by the cryptocurrency community and financial regulators worldwide.
Key Points from the SEC’s Final Reply
In its latest submission, the SEC refutes Ripple's arguments that the blockchain company acted without recklessness and asserts that there remains “widespread uncertainty” regarding the legal status of XRP. This stance comes despite the court's earlier rejection of Ripple's "fair notice" defense. The SEC emphasizes the possibility of future violations by Ripple, indicating that past compliance does not guarantee future adherence.
More of the same from the SEC -- failing to faithfully apply the law and trying to pull the wool over the Judge’s eyes. The good news is that we are closer than ever to putting this lawsuit behind us, though unfortunately, many are just starting the journey. We trust the Court… https://t.co/JGhxAtOuk1
— Stuart Alderoty (@s_alderoty) May 7, 2024
Source: Stuart Alderoty
Ripple’s Position and SEC’s Concerns
Ripple has attempted to minimize its liability, underscoring its cooperative efforts with the SEC since the initial coin offering of XRP in 2013. However, the SEC argues that Ripple's recent compliance does not eliminate the risk of future breaches. According to the SEC, Ripple's claims about restructuring future XRP sales and following legal guidance are misleading, as they misinterpret the court's orders and fail to adequately address compliance requirements.
Disputed Claims and Ripple’s Defense
The SEC's filing dismisses several of Ripple’s defenses, including claims about conducting sales outside the U.S. and to accredited investors, noting that these points were not maintained during the summary judgment phase. The Commission also rejected Ripple's assertions regarding contract changes for on-demand liquidity sales, stating that these contracts previously lacked necessary restrictions.
Ripple’s Legal Officer Responds
Stuart Alderoty, Ripple’s chief legal officer, responded to the SEC's filing by criticizing the Commission's approach and its impact on the SEC’s reputation. He argued that international regulators with established crypto licensing frameworks might find the SEC's actions perplexing, likening them to an authority issuing fishing licenses rather than robust financial oversight.
Looking Forward
The crypto community and financial analysts are eagerly awaiting the final judgment, which is anticipated around September. Meanwhile, Ripple is advancing its business strategy, planning to introduce XRPL enterprise solutions in the Japanese market through a partnership with Tokyo-based consulting firm HashKey DX.
