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The US Securities and Exchange Commission (SEC) demands nearly $2 billion from Ripple for XRP sales to institutional investors, alleging violations of securities laws. Ripple contests these claims in court. The ongoing legal battle between Ripple and the SEC, now in its second round, is closely watched as it sets precedents for the crypto industry’s regulatory landscape.
The US Securities and Exchange Commission (SEC) has formulated its demands on Ripple for XRP sales to institutional investors. These amount to almost $2 billion. Ripple relies on the responsible court.
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Second round in the US Securities and Exchange Commission’s trial against Ripple (XRP)
After round one in court last summer clearly went to Ripple, everything now revolves around sales of XRP to institutional investors. According to the SEC, Ripple is said to have systematically and permanently violated securities laws. The SEC is demanding that the court in New York punish Ripple with punitive and compensatory damages totaling almost $2 billion.
Ripple’s general counsel, Stuart Alderoty, had already rejected the SEC’s allegations via X before the partially redacted documents were published. Ripple will file its response in April and trusts the court. This had classified XRP sales in July 2023 to private individuals and through crypto exchanges as permissible and thus rejected the SEC’s application to treat Ripple’s cryptocurrency as a security. The lawsuit was initiated by the SEC in December 2020, at which time the supervisory authority counted at least $1.3 billion in damages.
The tough legal dispute between Ripple and the SEC has long since become a precedent for the crypto industry. In general, the SEC wants to force dozens of cryptocurrencies under its regulation as securities, including apparently Ethereum (ETH).
What’s exciting about the SEC’s new evidence is that it also includes Ripple’s XRP sales after the first ruling. Ripple is said to have collected more than $1 billion from institutional investors and intentionally misrepresented the legal situation.
Conclusion: Ripple and SEC start second battle
Ripple has until April 22nd to comment on the SEC’s submission to the court. A settlement seems out of reach and it is becoming apparent that the court will have to make a second judgment. At the same time, the SEC is prosecuting, among others, the crypto exchanges Coinbase and Binance, where allegations of illegal securities trading also play a major role. The crypto scene will have to keep an eye on the SEC’s behavior this year and the trial is a guide.
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(Featured image by salesblog_at via Pixabay)
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