The ongoing legal battle between Ripple Labs and the United States Securities and Exchange Commission is currently in its trial phase. Despite this phase traditionally being the period where resolutions are reached, the end date remains uncertain. However, recent events as of June 27th shed some light on the progress of the case.
One of the significant developments in the past few weeks was the SEC’s decision to reduce its demand for a penalty from an initial $2 billion to $102.6 million. The SEC justified this reduction by stating that Ripple had failed to compare the Terraform settlement’s penalty to the gross profit of the alleged misconduct, resulting in a significantly higher percentage. This led to the SEC requesting a penalty of $102.6 million, a figure much higher than the $10 million limit advocated by Ripple.
Ripple’s legal team pushed for a lower penalty not exceeding $10 million, further highlighting the disparity in penalty expectations between the two parties. Additionally, the SEC’s Chief of the Crypto Asset and Cyber Unit, David Hirsh, resigned amidst the ongoing legal battle.
Ripple is also facing legal challenges from another front, with its CEO Brad Garlinghouse being named as a defendant in a civil lawsuit in California. However, recent positive developments have emerged, with Ripple’s chief lawyer reporting that a California judge dismissed all allegations of federal securities law violations against the company. Furthermore, a New York ruling confirming that XRP is not a security remains unchallenged.
Both Stuart Alderoty, Ripple’s legal chief, and Brad Garlinghouse, the company’s CEO, have taken strong stances against the SEC’s chairman, Gary Gensler. In response to Gensler’s comments on the cryptocurrency industry, Garlinghouse criticized Gensler’s statements as “absolute nonsense.” He further questioned Gensler’s effectiveness in serving the American people, suggesting that his actions may lead to negative consequences, including causing President Biden to lose the election.
The ongoing legal battle between Ripple Labs and the SEC continues to unfold, with recent developments indicating a complex and contentious legal environment surrounding the case. The varying penalty demands, resignations, legal challenges, and public criticisms underscore the high stakes involved in this legal dispute for both parties.
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