As a researcher with extensive experience in the cryptocurrency industry, I cannot help but express my concern over the ongoing legal dispute between Ripple Labs and the United States Securities and Exchange Commission (SEC) regarding the classification of XRP as a security. This case has significant implications for not only Ripple but the entire crypto industry.
As a researcher examining the intricacies of the financial sector, I can’t help but acknowledge the significant implications of the ongoing controversy between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs regarding the classification of XRP. This dispute, which centers around whether XRP should be recognized as a security or not, has the potential to shape the industry at large.
The case has been going on for many years now, and it’s currently in its trial phase.
Here are the most important developments as of late.
Trouble at the SEC?
I’ve recently come across some news from CryptoPotato that the head of the Crypto Asset and Cyber Unit at the Securities and Exchange Commission (SEC), David Hirsh, has stepped down from his position.
Hirsh made the announcement on LinkedIn about his decision to step down from his position at the SEC, where he had dedicated nearly a decade of service. Contrary to speculation, he clarified that he would not be joining the crypto project pump.fun in his next endeavor. Instead, he expressed his intention to focus on spending quality time with his family before embarking on a new phase in his professional life.
As a crypto investor, I’ve noticed an interesting development in recent news. A few days ago, the Securities and Exchange Commission (SEC) reduced the proposed penalty for a particular case from an astonishing $2 billion down to a more manageable $102.6 million.
In reaction to Ripple’s legal team’s request, the penalty was proposed to be reduced to a maximum of $10 million.
The SEC stated:
Ripple’s penalty for violating regulations, based on the Terraform Settlement’s ratio of $420 million in penalties to $3.587 billion in gross profits (a 11.7% ratio), would amount to approximately $102.6 million if applied to Ripple’s $876.3 million in reported gross profits. This is significantly higher than the $10 million penalty limit that Ripple has proposed. The SEC seeks the court’s approval for this larger penalty figure.
Battling on Multiple Fronts
As a crypto investor following the developments of Ripple closely, I can’t help but note that the company’s legal challenges extend beyond the high-profile case with the Securities and Exchange Commission (SEC). An additional lawsuit involving Ripple’s CEO, Brad Garlinghouse, has surfaced in California.
It has to do with the following statements that he made years ago:
As a dedicated analyst of the digital asset market, I have made a significant investment in XRP, making it a substantial portion of my personal portfolio. Unlike some other digital assets, the utility and problem-solving capabilities of XRP are clear to me. If you’re addressing a real issue at scale, there lies an immense opportunity for continued growth. Having experienced success with XRP thus far, I remain committed to this investment, embracing the industry term “HODL” rather than simply holding.
As a researcher studying this legal case, I can share that although the trial went forward, the previous judge rejected several accusations levied against Ripple. Among these were claims suggesting potential violations of federal securities regulations.
Ripple’s chief lawyer said:
A California judge has ruled against all claims that Ripple broke federal securities regulations. The previous New York determination that XRP is not classified as a security remains unchanged.
In one upcoming state court case based on a 2017 declaration, a plaintiff asserts a claim against Ripple. Noteworthy, this individual didn’t buy from Ripple directly and has no certainty regarding whether they were even aware of the statement before executing their trade. The anticipated cross-examination promises to be intriguing.
Garlinhouse likewise emphasized that this success is significant for the business, and he continues to support the comments he made back in 2017.
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2024-06-24 07:25