Ripple Responds To SEC Remedies With A $10M Power Move

In the XRP lawsuit, Ripple It has been submitted Opposition to Securities and Exchange Commission (SEC) Motion for Relief and Final Judgment. Fintech companies are countering the regulator’s roughly $2 billion penalty with proposed fines of only $10 million. Ripple’s 186-page opposition document, filed late Monday, follows a court ruling that found Ripple violated securities laws by selling XRP to institutional investors without proper registration. , details the rebuttal to the SEC’s stringent requirements.

Ripple vs. SEC: $10 million or $2 billion?

Ripple begins by acknowledging the violation, confirms recognition of the court’s decision, and details compliance adjustments. “Ripple has publicly acknowledged that ruling and now acknowledges it again. We have changed the way we sell XRP and modified our contracts to avoid the problems identified by this court,” the document states. ing. This approval is critical because it sets the stage for the company’s argument that further punitive action, such as an injunction, is not necessary.

The company strongly opposes the SEC’s proposed injunction, arguing that it has already implemented significant changes to prevent future violations. A key passage in the document asserts that “the SEC has failed to establish a reasonable possibility of future violations.” This argument is built on the premise that Ripple’s proactive corrective actions effectively reduce the risk of repeating past mistakes.

In response to the SEC’s disgorgement request, fintech companies argue that the request is unreasonable because the SEC has not proven that Ripple’s actions caused financial harm to investors. Opponents say, “The SEC has not shown that disgorgement is legitimate. The government prohibits disgorgement because the SEC cannot prove financial harm.” This point is important in Ripple’s defense. Importantly, it emphasizes that there will be no direct financial harm to investors as a result of Ripple’s actions.

Regarding the civil fine, Ripple is arguing for a significant reduction in the amount, arguing that the SEC’s demands are disproportionate compared to fines in similar cases. “No civil penalty shall exceed $10 million,” the document states, suggesting that such a figure is more consistent with precedent and the nature of the violation.

Case law plays an important role in the defense, with many citations aimed at strengthening the position against harsh penalties. One such precedent is Arthur Lipper Corp. v. SEC, which the company uses to argue the need for an injunction. The document states that the injunction serves to “prevent the threat of future harm” and requires “clear evidence that past misconduct is reasonably likely to recur,” but Ripple The company contends that no such thing exists given the corrective action taken.

Reactions from the XRP lawyer community

The reaction from the pro-XRP legal community reflects a belief in the strength of the argument. Bill Morgan, a prominent pro-XRP lawyer, said: commented Regarding the strength of Ripple’s position on disgorgement, he said, “In summary, I think the argument is correct. There should be no disgorgement that gives investors a windfall.” The situation appears to be good for ordering a disgorgement ban. ”

Additionally, Jeremy Hogan claimed via X, “The SEC has major legal issues to address if it wants to win against Ripple, but I still think it squandered an opportunity to gain an advantage with its initial brief.”

James “MetaLawMan” Murphy explained What to expect next? He said Judge Torres has not set a deadline for sentencing. “However, I expect this decision to be rendered significantly sooner than the summary judgment ruling. The best guess is that since the last report (May 6) he has reached between 60 and 90 Isn’t it a day later?

At the time of writing, XRP is trading at $0.54921, up 2.5% in the past 24 hours.

XRP price, 1 week chart | Source: XRPUSD on TradingView.com

Featured image from Shutterstock, chart from TradingView.com

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