There appears to be some confusion regarding the status of the ongoing lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC). Crypto influencer Crypto Eri (@sentosumosaba) shared information on X regarding a final pretrial conference for the Ripple vs. SEC case scheduled for April 16, 2024. However, Stuart Alderoty, Chief Legal Officer at Ripple, clarified that this information is inaccurate.
Seeing some confusion on next steps with the SEC vs. Ripple case. To clarify – Ripple will file its response to the SEC’s request for penalties by April 22 and the SEC has until May 6 to reply. There is no final pretrial conference because the SEC dismissed the charges against… https://t.co/Jn5Pw5rM30
— Stuart Alderoty (@s_alderoty) April 16, 2024
The XRP Lawsuit
In December 2020, the SEC filed a lawsuit against Ripple. This lawsuit also extended to Brad Garlinghouse and Chris Larsen, two of the company’s executives. The regulator accused Ripple of selling XRP as an unregistered security and charged the executives for allegedly aiding and abetting these sales.
However, the court determined that non-institutional sales of XRP are not securities offerings in July 2023. The SEC attempted to appeal this decision, but its interlocutory appeal was denied.
Shortly after, the SEC’s dismissal of the charges against Ripple executives, Brad Garlinghouse and Chris Larsen, in late 2023 eliminated the need for a final pretrial conference. These conferences typically address outstanding issues before trial and explore settlement possibilities.
Upcoming Deadlines and the Lawsuit’s Future
While the final pretrial conference is no longer relevant, the case is still ongoing. The first of the upcoming deadlines is April 22, 2024, when Ripple is scheduled to submit its response to the SEC’s request for penalties. The SEC is looking to collect almost $2 billion from Ripple for its alleged securities law violations.
May 6, 2024, was the other date highlighted by Alderoty. The SEC has until this date to file a reply to Ripple’s response on penalties. These deadlines suggest that the court may be nearing a resolution on the matter of penalties. However, it is important to note that this does not necessarily indicate the conclusion of the entire lawsuit.
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Although there are rumors of a settlement, the SEC, under current Chair Gary Gensler, has been relentless in pursuing cryptocurrency companies, attempting to label many members of the altcoin market as securities. As a result, some speculate that the SEC might appeal the decision from July 2023.
However, the SEC’s chances of collecting the $2 billion penalty have been reduced. The SEC was dealt a significant blow in late 2023 when the court decided in the Govil lawsuit that the regulator could not demand crippling disgorgement awards without providing proof that investors incurred losses.
The SEC filed an interlocutory appeal, but the court denied the appeal. Proving investor losses will be significantly difficult for the SEC in the XRP lawsuit, making the $2 billion fine almost impossible.
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