The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) is nearing its end as the remedies stage of the lawsuit comes to a close.
As per the court’s schedule, Ripple will submit its reply to the SEC’s opening remedies-related brief today, April 22, 2024.
Ripple’s upcoming opposition brief will be filed in the U.S. District Court for the Southern District of New York (SDNY), but it will remain confidential until April 24, when a redacted version will be made public.
Once Ripple files its reply brief today, the parties will meet tomorrow, April 23, to discuss necessary redactions before the filing becomes public on April 24.
The SEC’s demands have garnered strong reactions from the crypto community. Last month, the SEC filed its opening remedies brief, requesting that Ripple pay nearly $2 billion in fines and penalties for violating securities laws through its XRP institutional sales. The SEC also asked the court to impose sanctions on Ripple to prevent further violations.
Ripple CEO Brad Garlinghouse expressed surprise at the SEC’s demand, noting that it is unprecedented in a case that lacks allegations of fraud or recklessness.
Garlinghouse hinted at what can be expected in Ripple’s opposition brief, suggesting that the company would expose the regulatory agency. He tweeted a gif describing the SEC as an unserious agency for making such a hefty demand.
It is unclear how Ripple plans to challenge the SEC, but there are speculations that Ripple could use the ruling made in the SEC v. Govil case by the Second Circuit. The ruling stated that the SEC is only entitled to disgorgement from the seller when buyers suffer financial losses.
If Ripple leverages the Govil ruling, it could argue for disgorgement based on the Second Circuit decision. This would involve Ripple paying disgorgement based on the number of institutional investors who incurred losses by purchasing XRP at prices higher than the current rate of $0.5351. However, legal experts have raised doubts about the viability of this argument since the SEC does not claim that Ripple’s sales caused losses.
After Ripple submits its opposition brief, the SEC will have an opportunity to file a reply by May 6. Following that, Judge Analisa Torres will issue the final judgment, concluding the lawsuit at the district court level.
If any of the parties are dissatisfied with the final or summary judgment decisions, the lawsuit could proceed to the Second Circuit.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. The opinions expressed in this article are solely those of the author and do not reflect the views of The Crypto Basic. Readers are advised to conduct their own research before making any investment decisions. The Crypto Basic is not responsible for any financial losses incurred.
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