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- The federal court confirms XRP as non-security, penalizing Ripple with a $700 million fine.
- The SEC’s next steps involve either proceeding to trial, settling, or dismissing the Ripple case.
The Court’s Stand on Ripple vs. SEC
In a pivotal ruling, the federal court, led by Judge Analisa Torres, put a damper on the SEC’s endeavors by rejecting their plea for an interlocutory appeal in their litigation against Ripple. Rewinding to its previous decision in mid-July, the court maintained that XRP is not a security. Subsequently, Ripple faced a substantial penalty of $700 million for the unauthorized sale of securities to institutional entities. The case is set to recommence on April 23, 2024.
Navigating the Legal Labyrinth: Insights from an SEC Veteran
Marc Fagel, an esteemed retired lawyer and ex-regional director of the SEC, offered a comprehensive look into what could possibly unfold next. Fagel emphasized that the SEC has a few courses of action ahead: march towards trial, seek a settlement, or entirely dismiss the Ripple case. Additionally, a crucial point to be addressed is the suitable remedy for Ripple’s illicit securities offering, which can be reached either via negotiation or court proceedings.
Taking to social media, Fagel mentioned,
“I’m not carrying water for anyone; I disagree with a lot of how they’ve handled the crypto space. But there are also places where they are 100% correct, like suing a company that illegally raised over $700M in violation of the securities laws.”
When probed about the potential settlement figure concerning the $700 million transgressions, Fagel remarked on the exceptional nature of the case, indicating the difficulty in pinpointing an exact amount. He expressed reservations about the SEC’s strategy, especially targeting Ripple‘s premier executives, Brad Garlinghouse and Chris Larsen, in their initial grievance. In Fagel’s view, pursuing singular cases against these executives seems redundant due to the unlikely chance of triumph.
The manner in which the SEC has managed the case has generated extensive discussions about its repercussions on retail investors. While Fagel concedes the SEC made certain misjudgments in the realm of cryptocurrency, he ardently defended its stance against Ripple, emphasizing the gravity of penalizing a firm that illegitimately accumulated a staggering sum of over $700 million. This stance, he believes, reiterates the SEC’s unwavering commitment to enforcing securities regulations.
