Potential Resolution in Ripple Labs vs. SEC Legal Battle
The ongoing legal conflict between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) may be approaching a conclusion, according to a report by Fox Business, which cites information from two well-placed sources. This case has been unfolding since December 2020, when the SEC accused Ripple of generating over $1.3 billion through unregistered sales of its closely associated token, XRP.
As the case nears its possible resolution, there is still some last-minute negotiation taking place regarding its terms. Sources have informed Fox that Ripple’s legal team is advocating for a reevaluation of certain aspects of a pivotal ruling delivered in 2023 by District Judge Analisa Torres of the Southern District of New York (SDNY). In this significant decision, Judge Torres imposed a $125 million penalty on Ripple for its institutional sales of XRP, classifying these transactions as unregistered securities offerings. This ruling was notably less severe than the nearly $2 billion fine that the SEC had initially sought.
It is important to note that the SEC filed an appeal against Torres’ ruling shortly before former Chair Gary Gensler stepped down from his position. At the time of the ruling, many viewed it as a substantial victory for Ripple, particularly as the court determined that Ripple’s programmatic sales of XRP to exchanges intended for retail traders did not fall under the category of securities transactions.
However, the landscape has shifted recently. With the SEC and its new leadership retreating from numerous investigations into cryptocurrency firms, including dropping ongoing enforcement actions against notable companies such as Coinbase, Cumberland DRW, and Kraken, Ripple’s partial success might not carry the same weight as it once did. In light of these developments, the price of XRP saw a modest increase of 3% following the news.
A representative for Ripple has yet to respond to CoinDesk’s request for comment as of the time of this writing.
