The long-standing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple is nearing its conclusion as the remedies stage of the lawsuit comes to a close. As per the court’s schedule, Ripple will submit its response to the SEC’s opening remedies-related brief today, April 22, 2024.
In the upcoming opposition brief, which will be filed in the U.S. District Court for the Southern District of New York (SDNY), Ripple’s arguments will remain confidential until April 24 when a redacted version will be made available to the public. The parties involved will meet and discuss necessary redactions on April 23.
Last month, the SEC filed its opening remedies brief, requesting that Ripple pay fines and penalties amounting to approximately $2 billion for violating securities laws through its XRP institutional sales. The SEC also urged the court to impose sanctions to prevent Ripple from further violations. This demand took many in the crypto community by surprise, including Ripple CEO Brad Garlinghouse, who highlighted that such a demand in a case without fraud or recklessness allegations is unprecedented.
Garlinghouse hinted at what can be expected in Ripple’s opposition brief, suggesting that the company will expose the regulatory agency. He shared a tweet with a gif describing the SEC as an unserious agency for making such a substantial demand.
Although it is unclear how Ripple plans to challenge the SEC, speculations suggest that the company may rely on the ruling in the SEC v. Govil case by the Second Circuit. This ruling states that the SEC is only entitled to disgorgement from the seller when buyers suffer financial losses. If Ripple leverages this ruling, it could ask Judge Analisa Torres to impose disgorgement based on the Second Circuit decision.
Following the submission of Ripple’s opposition brief, the SEC will have an opportunity to file a reply by May 6. Subsequently, Judge Torres will issue the final judgment, bringing the lawsuit to a conclusion at the district court level. If any of the parties are dissatisfied with the final judgment, the lawsuit could proceed to the Second Circuit.
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