The U.S. Securities and Exchange Commission (SEC) might have a tough time in its case against Ripple during the remedies stage following the Second Circuit decision in the Govil lawsuit. XRP attorneys have shared their opinion on X about the impact of the Govil ruling in the remedies stage of the XRP lawsuit.
Stuart Alderoty, the Chief Legal Officer (CLO) of Ripple, drew attention to the SEC’s recent loss in the case involving Aaron Govil.
Alderoty explained that the Second Circuit’s ruling means the SEC cannot ask for a “crippling disgorgement” from the defendant unless they can prove that investors suffered real financial losses.
Read Also: Ripple Faces SEC’s $770 Million Settlement Demand in XRP Lawsuit
Another notable pro-XRP attorney, Jeremy Hogan, confidently argued that individuals who purchased XRP at a price lower than its current value of $0.61 have not incurred any financial harm. Hogan added, “Alderoty is highlighting this case because they are in the “damages” phase.”
According to Hogan, the requirement for XRP holders to demonstrate actual financial losses to hold Ripple accountable is a pivotal aspect of the case. In plain terms, he said unless holders bought XRP at a price higher than its current market value, they may not have suffered any financial harm attributable to Ripple, at least according to this specific case’s interpretation.
Alderoty is highlighting this case because they are in the "damages" phase.
And this case is saying that XRP holders must have LOST money on XRP in order for Ripple to be liable.
And if you bought XRP for under its current price, you haven't been damaged – by Ripple, at least. https://t.co/VRR2IIcMDu pic.twitter.com/tMGd1e0hVe
— Jeremy Hogan (@attorneyjeremy1) November 3, 2023
The Next Phase of the Lawsuit
The next phase in the XRP lawsuit is the remedies phase. Judge Analisa Torres’s ruling in July determined that only Ripple’s institutional sales of XRP violated securities laws.
In the remedies stage, the court’s primary focus will be to determine the appropriate monetary penalty that Ripple should incur for its alleged violation of the law, particularly in connection with its sale of $770 million worth of XRP to institutional investors.
Bill Morgan, another prominent attorney, also asked for the evidence the SEC had to prove that institutional investors suffered financial harm from investments in XRP. Sticking to the precedent set by the Govil ruling, the SEC might suffer another loss after three consecutive losses against Ripple in the lawsuit.
Some legal experts believe that the SEC will push for Ripple to pay a substantial portion of the $770 million in sales as a fine. They argue that such a significant penalty is warranted, given the alleged violations. However, others believe that Ripple will try to reduce the magnitude of the fine during the remedies briefing.
John Deaton, a prominent pro-XRP lawyer and representative of the XRP 75,000, recently shared his thoughts on the potential timeline of the lawsuit, and the mindsets of each party going into the remedies phase.
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