XRP Lawsuit Update: Ripple CLO Hits Back at SEC for “Unfair” Enforcement Practices

The United States Securities and Exchange Commission has submitted its final brief on remedies in response to Ripple Labs’ brief. The case focuses entirely on the need for permanent injunctions and disgorgement. The SEC’s stab at Ripple caused its chief legal officer, Stuart Alderoty, to go after X, critically questioning the SEC’s commitment to fair enforcement of the law.

This latest court filing lays out the SEC’s case for tougher sanctions, while Ripple argues the SEC’s demands are disproportionate.

SEC Argument for Injunctions

In its final appeal brief, the SEC argues the need for “permanent injunctions” because there is a “reasonable probability” that Ripple will repeat its wrongdoing.

The SEC is going after Ripple, saying that even after 3 years of litigation, Ripple’s primary business “continues to be, as it has been since 2013, the unregistered sale of XRP.” From there, the SEC asserts that even if Ripple had not committed a single violation since 2020, another violation could still “be anticipated.”

In the previous appeal brief submitted by Ripple, the company claimed that it had made necessary changes to its business model to avoid future violations.

However, the SEC counter-argues this claim, stating that “Ripple’s first ‘assurance’ is not even real insurance – rather, it is another attempt to revive summary judgment arguments.” The SEC’s latest remedial action report appears to point the finger at the company, emphasizing that any changes Ripple makes are nothing more than a “misreading or ignorance of what the order says” .

All of these elements form the basis of the SEC’s argument to impose a permanent injunction on Riple Inc. from operating.

Furious CLO criticizes SEC approach

Criticism poured in after the SEC’s relief filing was made public, with Stuart Alderoty, Ripple’s chief legal officer, reacting sharply to the SEC’s final relief filing.

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Alderoty also criticized the US SEC’s perceived lack of respect for international regulatory frameworks.

He wrote: “And just when you think the SEC can’t sink any lower if you’re a financial regulator outside the US and have worked hard to establish comprehensive crypto licensing frameworks, know that the SEC has no respect for you and thinks you are handing out the equivalent of fishing licenses.

Financial issues and upcoming decision

In its final brief, the SEC made clear that it would not back down from demanding $2 billion in penalties and fines. Of this crazy amount, the SEC used Ripple’s claimed millions in profits from its unregistered sales of XRP as grounds for disgorgement.

The SEC says Ripple’s arguments against disgorgement are without merit, stating: “The SEC demonstrated that Ripple’s violation – its failure to provide legally required pricing and rebate information – caused monetary harm because some institutional investors paid more than they would have received. all required information.

On the other hand, Ripple’s latest submission proposed a significantly lower penalty amount, suggesting that a fine of less than $10 million would be more appropriate. She said the SEC’s requirements were far too excessive.

Nonetheless, Ripple’s CLO, Mr. Alderoty, expressed his hopes for Ripple’s progress in resolving the lawsuit. All that remains is for Judge Sarah Netburn to review the briefs and issue the court’s final ruling that will determine whether the SEC’s injunctions and disgorgement demands stand, or whether a settlement sets precedent for future ones. enforcement measures in the crypto industry.