Ripple Faces $770 Million SEC Demand in Ongoing Legal Battle
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more
In a continued legal battle between Ripple Labs, the creators of the XRP token, and the US Securities and Exchange Commission (SEC), the SEC is now pushing for a hefty settlement of $770 million. This development marks another twist in a years-long lawsuit that revolves around the classification of XRP as a security.
As I said on @CryptoLawUS TV yesterday with @attorneyjeremy1 and Thien-Vu, I do not believe there has been a single serious conversation regarding settlement between @Ripple @bgarlinghouse @chrislarsensf and the @SECGov.
The SEC is pissed and embarrassed and wants $770M worth… https://t.co/kcXvsrPgaa
— John E Deaton (@JohnEDeaton1) October 25, 2023
How It All Began
The SEC initially filed the lawsuit in December 2020, accusing Ripple and its key figures of conducting an unregistered securities offering through the sale of XRP, which Ripple had introduced in 2012. Ripple firmly denies these allegations, arguing that XRP is a digital currency and not a security, thereby challenging the SEC’s jurisdiction.
The lawsuit’s repercussions have been felt keenly in the crypto space, notably leading to XRP being delisted from several US exchanges, including Coinbase. Furthermore, XRP has struggled to attain new all-time highs during the previous bull market, in stark contrast to other cryptocurrencies.
Ripple Executives Vindicated
Despite the challenges, Ripple has notched some victories along the way. A recent highlight came on October 19, 2023, when a US District Court judge dismissed the SEC’s charges against Ripple’s top executives, Brad Garlinghouse and Christian Larsen.
Today was an even better day.
Ripple: 3
SEC: 0In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a… https://t.co/YsQxewFnj9
— Brad Garlinghouse (@bgarlinghouse) October 19, 2023
The battle rages on, with the SEC now pursuing a substantial settlement. Legal expert John Deaton, representing XRP holders, revealed that the SEC appears “pissed and embarrassed” by its setbacks and is eager to secure a substantial fine from Ripple. On the other side, Ripple aims to reduce the penalty by excluding specific transactions, such as on-demand liquidity (ODL), which leverages XRP for cross-border payments.
The penalty phase of the case may extend for another year before any appeals can be made. The outcome of this high-profile legal clash bears immense significance for the entire cryptocurrency industry, as it could establish a pivotal precedent for the regulation of digital assets within the United States.
As the legal standoff unfolds, the crypto community and financial markets watch with bated breath, awaiting the final chapter in the Ripple-SEC saga, with millions of dollars and regulatory precedent hanging in the balance.
