The last retort of the lawsuit, in which the United States Securities and Exchange Commission (SEC) is involved with Ripple Labs has been filed. With this new submission, the remedies stage of the lawsuit makes a very important step, where the SEC is still strengthening its position against the blockchain company. Since 2020, the SEC questions Ripple’s assertion that it operated without any recklessness with respect to the sale and distribution of XRP tokens.
The SEC said that although Ripple stands by the fact that it was not reckless, it could not assure that there would not be similar violations in the future. The regulator emphasizes that previous behavior of Ripple indicates that there is a potential for future breaches and, consequently, the need for legal orders. This action by the SEC is meant to procure sanctions that would stop Ripple from doing the said violations in the future.
Ripple’s legal changes disputed by SEC
The filing by the SEC contradicts Ripple’s interpretations of the previous court orders and changes that the company proposes to make to its operations. Ripple has mentioned that it will seek to reformat its XRP sales and activities based on the legal results of the suit. On the other hand, the SEC claims that Ripple’s intentions are grounded on a misinterpretation of the court order and do not meet all the required legal requirements.
Additionally, the SEC slams Ripple for sticking to the XRP sales only outside the US and to accredited investors, despite those defenses having been put aside during the summary judgment stage of the lawsuit. The regulator also rejects all changes that Ripple made to its on-demand liquidity sales contracts, pointing that these contracts did not have limitations that were earlier stated as breaches.
XRP response and upcoming developments
In reaction to the SEC’s latest legal tactics, Ripple’s General Counsel, Stuart Alderoty, was openly critical of the SEC’s tactics and suggested it would damage the SEC’s reputation. Alderoty pointed out disparities in SEC application of law in contrast to the global financial regulatory practices. However the legal situation is very challenging, but he is still hopeful the lawsuit will be resolved in his favor.
The cryptocurrency community is eager for the legal result of this case, and a final judgment is expected in September. At the same time, Ripple is not stopping its business activities and has introduced a strategic alliance with Tokyo consulting company HashKey DX. This partnership seeks to bring Ripple’s XRPL enterprise solutions to the Japanese market, demonstrating Ripple’s persistence to establish a global presence, despite the legal troubles that it currently faces in the United States territories.
As the last phases of the legal battle between the SEC and Ripple loom, the implications for the entire cryptocurrency market are considerable. This case could become a landmark in setting standards and practices in recognition of value in digital assets throughout the United States, influencing many participants of the fintech and blockchain sectors.
