Chair

Gary

<a href="https://cryptoticker.io/en/token/XRP">Ripple </a>Labs has responded to the SEC's request for penalties and a final decision. They disagree with the SEC's demand for over $1 billion in payments. Instead, Ripple is willing to pay a maximum penalty of $10 million, much lower than what the SEC is asking for.
<h2 id="sec-v-ripple-lawsuit">SEC v. Ripple Lawsuit</h2>
<a href="https://www.dropbox.com/scl/fi/z57n3w37mr6mirqaajutn/Ripple-Remedies-Opposition-4.22.24.pdf?rlkey=dzxh1l6z47qcczbckorjncchp&amp;e=2&amp;dl=0">In a court filing dated April 22</a>, Ripple contested the arguments and penalties put forth by the U.S. SEC in its remedies-related briefing. Ripple acknowledged its obligation to pay civil penalties after the court determined that the company had violated Section 5 of the Securities Act of 1933 by offering XRP through institutional investment contracts.
Ripple articulated three key arguments:
<ul>
 <li>The SEC has not convincingly demonstrated a likelihood of future violations or reckless disregard for the law in Ripple's institutional sales.</li>
 <li>Ripple referenced the Govil case to assert that disgorgement should be barred since the SEC has not shown pecuniary harm, and any legitimate business expenses of Ripple should be subtracted from any disgorgement amount.</li>
 <li>Ripple argued that any civil penalty imposed should not exceed $10 million, pointing to the SEC's weak rationale and the level of fines in similar digital asset cases.</li>
</ul>
<a href="https://cryptoticker.io/en/breaking-news-sec-vs-ripple">Ripple informed the court</a> that it has implemented significant changes to its XRP sales approach, including obtaining licenses for sales outside the U.S. and revising contracts to mitigate potential issues, as directed by the court. Despite these adjustments, Ripple disagreed with the SEC's remedial requests, which it viewed as an instance of regulatory overreach, particularly objecting to the proposed injunction based on speculative future law violations by Ripple.
In addition to its opposition brief, Ripple submitted supporting declarations and exhibits demonstrating the company's compliance efforts and the acquisition of licenses enabling XRP sales in various jurisdictions.
The SEC is scheduled to submit its reply brief under seal by May 6. Moreover, all involved parties, including third parties, have until May 20 to submit letter motions and opposition related to the sealing of specific details in the filings.
<h2 id="sec-lawyers-resignations-prompt-ripple-s-response">SEC Lawyers' Resignations Prompt Ripple's Response</h2>
Ripple's Chief Legal Officer, Stuart Alderoty, has emphasized that the SEC's case against Ripple did not include any allegations or findings of recklessness or fraud. He expressed confidence that Judge Torres will approach and conclude this final remedies phase fairly.
Alderoty publicly addressed Ripple's opposition to the SEC's request for penalties amounting to $2 billion related to legacy institutional sales. He pointed out that the case, which did not involve allegations or findings of recklessness or fraud, resulted in significant victories for Ripple. Alderoty characterized the SEC's requested penalties as further evidence of the agency's ongoing efforts to intimidate the entire crypto industry in the United States.
The Ripple CEO also reacted. The statement from Ripple's CEO underscores the significance of filing their response on the same day that two SEC lawyers resigned due to misconduct in another case (the Debt Box case). This timing suggests a broader context of accountability and ethics within the SEC. By referencing the resignations, the CEO implies concerns about the integrity and behavior of individuals within the agency, raising questions about the credibility of SEC actions, including those against Ripple.&nbsp;
Criticism is directed towards the SEC's policies, described as "disastrous," with the implication that these policies will have lasting negative effects on the U.S. long after the tenure of current SEC Chair Gary Gensler. The statement highlights concerns about the regulatory landscape's impact on innovation, economic competitiveness, and broader industry development in fintech and cryptocurrencies.

Ripple Objects, Agrees to $10M Penalty in SEC Case

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