Tensions Mount as Ripple Prepares Response to $2 Billion Penalty in Ongoing SEC Lawsuit
Key Points:
– The SEC is seeking nearly $2 billion from Ripple, alleging violations in XRP sales.
– Ripple is preparing to file its opposition brief in response to the SEC’s claims.
– The SEC is requesting disgorgement of profits, prejudgment interest, and civil penalties from Ripple.
– Ripple may leverage recent legal victories and Coinbase’s clarification to strengthen its case.
– The SEC will submit a sealed reply brief on May 6, and parties have until May 20 to file motions and opposition related to sealing details.
– Despite the legal proceedings, XRP’s price remains resilient and shows potential bullish momentum.
The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is about to enter a crucial phase. Ripple’s defense team is preparing to submit its opposition brief as the SEC seeks final judgment and nearly $2 billion in penalties. Ripple will first submit a sealed response on April 22, followed by a redacted version that will likely be made public soon after.
The SEC has outlined its proposed remedies, which include disgorgement of profits derived from XRP sales and civil penalties against Ripple. Specifically, the SEC is seeking $876,308,712 in disgorgement, $198,150,940 in prejudgment interest, and a civil penalty of $876,308,712, totaling approximately $2 billion. These penalties are based on allegations of violating Section 5 of the Securities Act of 1933 and conducting unregistered offerings of XRP in institutional sales.
Ripple’s response to the SEC is expected to be filed on April 22. It will include a public redacted version of the opposition brief, along with supporting declarations and exhibits. However, any materials containing confidential information designated by the SEC may be filed under seal. Ripple may also release a public version of the exhibits, following an earlier protective order.
Ripple may use recent legal victories in the Aron Govil case to strengthen its defense. These victories highlighted that the SEC cannot seek disgorgement if buyers have not suffered financial losses. Additionally, Ripple could refer to Coinbase’s clarification that secondary market sales are not considered securities, which could further bolster its case.
On May 6, the SEC is scheduled to submit a sealed reply brief. Parties involved in the case, as well as third parties, have until May 20 to file letter motions and opposition related to sealing details contained in the filings.
Despite the legal proceedings, XRP’s price remains resilient. It is currently trading over $0.54 and has recorded a 5% increase in the last 24 hours. Positive market sentiment is reflected in the rise of XRP futures and options open interests, indicating potential bullish momentum in the days to come.