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SEC Submits Final Argument in Ripple XRP Lawsuit

May 8, 2024 at 04:13

In the ongoing legal confrontation between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), the SEC has delivered its final reply during the remedies phase of the case, asserting that Ripple’s recent conduct doesn’t eliminate the necessity for judicial measures to forestall future infractions.

In this latest filing, the SEC counters Ripple’s assertion that it acted without negligence and disputes the claim that there remains no “widespread uncertainty” regarding XRP’s legal status, despite Ripple’s “fair notice” defense being previously dismissed by the court.

The SEC holds firm on its view that Ripple might still engage in similar future violations, noting that no infractions have occurred since the commencement of the lawsuit in 2020. Ripple’s brief attempts to minimize its culpability, citing its compliance and cooperation with the SEC since the initial coin offering of XRP in 2013.

Despite Ripple’s claims of adhering to legal advice and modifying its sales practices of XRP in response to the lawsuit, the SEC criticizes these efforts as misinterpretations of the court’s directives and insufficient for ensuring compliance.

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The SEC’s document also dismisses Ripple’s statements about making sales to non-U.S. residents and accredited investors, noting that these points were not maintained during the summary judgment phase.

Additionally, Ripple’s modifications to contracts for on-demand liquidity sales, which the company presented as compliant, were rejected by the SEC, stating that these contracts lacked certain provisions previously identified as violations.

The SEC maintains that Ripple’s recent adjustments and arguments do not preclude the need for injunctions to deter future legal breaches.

Reacting to the SEC’s filing, Ripple’s Chief Legal Officer, Stuart Alderoty, criticized the SEC’s diminishing credibility and pointed out that global financial authorities with well-established crypto regulatory frameworks might find the SEC’s actions puzzling, likening them to issuing fishing licenses.

Alderoty expressed hope for a resolution in the lawsuit, anticipated by the crypto community to conclude around September. Meanwhile, Ripple is advancing its business initiatives by launching XRPL enterprise solutions in Japan, in collaboration with Tokyo-based HashKey DX.

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