The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) continues to unfold, with recent developments offering intriguing insights into a possible resolution. While the initial hope was for a swift conclusion, the complexities of the case have led to extended arguments and strategic maneuvering by both parties.
A key point of contention surrounds the testimony of Andrea Fox, presented by the SEC as evidence for potential disgorgement. Ripple argues that this testimony is an unsolicited expert opinion and should be excluded.
The SEC counters that she is a summary witness providing a standard calculation based on Ripple’s financial records, crucial for determining appropriate financial consequences. Interestingly, the SEC highlights that similar objections by Ripple have been dismissed by Judge Torres in the past, suggesting a potential lean toward the regulator’s position.
Experts Weigh In
Speaking on Fox’s testimony, legal expert Fred Rispoli believes the SEC’s failure to request a deposition for Fox was a crucial omission. The SEC’s case might be weakened if deposition requests for specific witnesses are missing, particularly if those witnesses weren’t accurately identified in the initial disclosure statement.
Speaking on the SEC’s $2 billion penalty request, Ripple’s Chief Legal Officer (CLO) Stuart Alderoty publicly expressed his concerns, highlighting the absence of fraud or recklessness allegations in the case.
He also noted Ripple’s previous victories on key matters. Alderoty described the SEC’s financial demands as an attempt to intimidate the cryptocurrency market in the U.S. Ripple has proposed a $10 million penalty in opposition to the SEC’s egregious request.
Adding to the discourse, attorney Jeremy Hogan offers an intriguing perspective. He anticipates the court will impose a penalty of $100 million on Ripple, significantly lower than the SEC’s initial $2 billion demand but considerably higher than Ripple’s proposed $10 million settlement amount.
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Hogan also believes that both parties will appeal after the final ruling. He says the case will be extended to 2025 but does not expect the appeals to hamper XRP in the current bull cycle.
Ripple’s defense strategy stands out for its aggressive and public nature. Unlike typical settlements in such cases, Ripple has chosen to actively contest the charges.
Despite these promising signs for Ripple, the SEC’s reputation for rigorous enforcement actions cautions against premature conclusions. Many prominent figures have called for the removal of SEC Chair Gary Gensler because of his enforcement actions against cryptocurrency companies. Although this is yet to happen, a victory for Ripple in the form of a small penalty might expose the flaws in the SEC’s practices.
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