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- Ripple is set to launch its own stablecoin, Ripple USD (RLUSD), in 2024, available on both the XRP Ledger and Ethereum networks.
- In the Ripple vs. SEC lawsuit, the SEC has defended its proposed penalties, citing a comparison with the Terraform Labs settlement.
As Ripple Inc. continues its legal battle with the U.S. Securities and Exchange Commission (SEC), it also continues to remain focused on other growth verticals for the company. One such area is that Ripple is preparing to introduce its own native stablecoin Ripple USD (RLUSD) to the market. This new stablecoin will serve as a bridge between the crypto industry and the traditional financial market, per the Crypto News Flash report.
Earlier this week, Ripple announced its new stablecoin, Ripple USD (ticker RLUSD), which will be available on both the XRP Ledger and Ethereum networks. The launch is scheduled for 2024, although the exact date remains undisclosed.
Despite not being live yet, the stablecoin has already faced criticism from the United States Securities and Exchange Commission (SEC), which labeled it an “unregistered crypto asset”.
Note that the launch of the Ripple USD stablecoin RLUSD depends on the outcome of its legal battle with the SEC. As per market analysts, the final settlement is likely to happen by the end of 2024.
Key Developments in Ripple vs. SEC Lawsuit
In its recent filing, the U.S. SEC has criticized Ripple for demanding a lower penalty of “no more than $10 million”, as reported by Crypto News Flash. One of the major arguments put forward by Ripple was that there were no allegations of fraud against the company. Ripple further cited the recent Terraform Labs’ judgment, stating that the $420 million civil penalty was around 1.27% of its “$33 billion gross sales”. Responding to this, the SEC stated that this is not an apples-to-apples comparison.
A day later, in a June 14 letter to Judge Torres, the SEC defended its $4.5 billion settlement with Terraform Labs and its co-founder Do Kwon. The settlement, which includes a $420 million civil penalty, was justified by the firm’s bankruptcy status, its agreement to return money to investors, and the dismissal of leaders responsible for the violations.
The SEC stated that it calculated Terraform’s penalty based on “the gross profit of the violative conduct,” which was estimated at over $3.5 billion, resulting in a nearly 12% penalty ratio, per the Crypto News Flash report. The regulator argued that applying the same ratio to Ripple’s gross profits of $876.3 million, which it seeks to disgorge, would result in a civil penalty of $102.6 million. “That low of a penalty would not satisfy the purposes of the civil penalty statutes,” the SEC said.
Interestingly, Ripple’s chief legal officer Stuart Alderoty saw the SEC’s ask for $102 million penalty as a positive development from the earlier ask of $2 billion.
Ripple CLO Stuart Alderoty hails SEC’s shift from $2B demand to $102M in latest filing, calling it a relief amid ongoing legal battle. Alderoty criticizes SEC’s handling, suggesting it unfairly targets Ripple’s growth. Community awaits final decision eagerly. #Ripple #SEC pic.twitter.com/JOEesK6il8
— Collin Brown (@CollinBrownXRP) June 17, 2024
XRP Price Action
Ripple’s native token has seen significant declines over the past week, currently trading at approximately $0.47. However, analysts like EGRAG CRYPTO on Twitter remain optimistic, considering the current price level a buying opportunity.
The trader highlighted the Relative Strength Index (RSI), which has hit low points in recent days. Currently, the RSI stands at 42, having dropped below 25 last week.
