The legal confrontation between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is currently under trial. While this phase typically suggests an approaching conclusion, the final verdict’s timing remains uncertain.
Here’s a rundown of the recent events in the case as of June 27th.
Where Things Stand with Ripple and the SEC
A notable recent event is the SEC’s dramatic reduction in the proposed penalty against Ripple, decreasing it from a staggering $2 billion to a more modest $102.6 million.
The SEC explained:
“Ripple bypasses the significant ratio of penalty to the total improper profits in the Terraform settlement: 11.7% derived from a penalty of $420 million against $3.587 billion in profits. By applying this to Ripple’s $876.3 million in improper gains, we suggest a penalty of $102.6 million, which is above the $10 million limit Ripple proposes.”
Ripple’s attorneys, on their part, are pushing for a substantially lower fine, capping it at $10 million at most.
In other developments, the head of the SEC’s Crypto Asset and Cyber Unit, David Hirsh, has stepped down from his role.
Besides the SEC lawsuit, Ripple is contending with another legal battle in California. Their CEO Brad Garlinghouse is implicated in a separate civil complaint. Yet, there’s a silver lining for the company there, as their lead counsel highlighted:
The Californian judge has ruled out the possibility of Ripple violating federal securities laws. This aligns with the New York decision which does not classify XRP as a security.
Criticizing SEC Chairman Gary Gensler
Ripple’s general counsel, Stuart Alderoty, and CEO Brad Garlinghouse have both expressed strong disapproval of Gary Gensler, the chairman of the SEC.
Gensler commented on the crypto industry, stating:
The industry’s previously hailed leaders are now facing jail time, either serving it, about to, or are awaiting extradition.
In reaction, Garlinghouse responded with criticism:
Gary Gensler’s remarks today are entirely erroneous. And his insinuation that all crypto executives are heading for jail – coming from somebody who overlooked the FTX failure and missed the announcement regarding Binance by the DOJ – is concerning.
Claiming he serves the public interest when he might have been dismissed long ago, I believe Gensler’s approach could be detrimental to the current administration’s electoral prospects.
Alderoty also challenged Gensler’s assertions:
No touch-up needed by the courts, they simply rule that your actions overreach legal boundaries, @GaryGensler. https://t.co/rne7JRygm2
— Stuart Alderoty (@s_alderoty) June 26, 2024
Image Source: DUSAN ZIDAR / Shutterstock
