- The SEC has submitted its final response in the ongoing legal battle with Ripple, challenging Ripple’s claims of non-recklessness and compliance.
- Despite Ripple’s assertions of changed practices and adherence to legal guidelines post-lawsuit, the SEC insists on the potential for future violations, advocating for injunctions.
- Ripple’s chief legal officer, Stuart Alderoty, criticizes the SEC’s stance and expresses confidence in a positive resolution by September.
In the latest development in the legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), the SEC has filed its final reply in the lawsuit’s remedies stage, vigorously challenging Ripple’s claims and emphasizing the need for strict injunctions to prevent future violations.
SEC’s Stance on Ripple’s Compliance
The SEC’s response to Ripple’s remedies brief highlights several areas of contention. The commission disputes Ripple’s assertion that it acted without recklessness concerning the legal status of its cryptocurrency, XRP. Despite Ripple’s arguments against the “fair notice” defense, the SEC maintains that there remains significant uncertainty about XRP’s legal status, which was not adequately addressed by Ripple from the outset.
Furthermore, the SEC argues that despite Ripple’s claim of no violations since the initiation of the lawsuit in 2020, the possibility of future infractions remains. The SEC contends that Ripple’s promises of altered practices post-lawsuit are insufficient grounds to avoid an injunction.
Ripple’s Defense and Adjustments
Ripple has attempted to mitigate its liability by pointing out its cooperative efforts with the SEC since the initial coin offering of XRP in 2013. However, the SEC criticizes these efforts, asserting that Ripple’s restructuring of future XRP sales and its claims of adhering to legal guidance are misleading. The SEC also rejects Ripple’s defenses related to conducting sales outside the U.S. and exclusively to accredited investors, noting that these were not maintained during summary judgment.
Legal and Industry Reactions
In response to the SEC’s filings, Stuart Alderoty, Ripple’s chief legal officer, expressed dissatisfaction with the SEC’s approach, suggesting that the commission’s reputation is suffering as a result of its actions in this case. Alderoty also noted the irony of the SEC’s regulatory efforts compared to international standards, which he believes are more robust and clear.
