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Ripple vs. SEC Lawsuit Update: Preparing for April 22nd as Supreme Court Showdown Looms

source-logo  coinpedia.org 18 April 2024 02:40, UTC

Amidst regulatory challenges and court disputes, Ripple Labs Inc. continues its legal battle with the U.S. Securities and Exchange Commission (SEC), a conflict that has significant implications for the cryptocurrency landscape.

Exploring the Legal Terrain

As Ripple and the SEC lock horns over the classification of crypto assets, the debate intensifies over how these digital tokens should be regulated. Speaking at a Columbia Business School event, former SEC litigator Linda Steward hinted that the dispute might eventually escalate to the Supreme Court.

Steward delineated the SEC’s stance, noting that the agency does not consider tokens themselves as securities but rather their sale and offers. Since yesterday, her view has sparked debates within the crypto and legal communities about the practical implications of such a stance.

During a notable exchange, blockchain lawyers questioned the feasibility of the SEC’s approach. “But then what do you register?” asked lawyer Rebecca Rettig. Steward answered that the token, plus “all the stuff around the token,” is the security. “You can’t register all the stuff, but you can register the token.”

Lawyer Bill Morgan scrutinized this recent discussion and debate of SEC practices.

Counter Thoughts

Bill Morgan criticized the SEC’s logic, stating, “The token represents the security. The SEC’s ideal outcome is a court accepts its theory that because the token has allegedly no inherent value that any sale must be an investment contract.”

Eleanor Terrett, a reporter at Fox Business, detailed in her report on X that starting May 22nd, the SEC is set to dramatically increase transaction fees for public companies, shifting from $8 to $27.80 per every $1 million in transactions.

This adjustment, necessitated by a shortfall in budget neutrality—under-collecting by $50 million last year and $414 million the previous year—reflects the agency’s effort to stabilize its financial status.

Amidst these regulatory challenges, Ripple prepares for its next legal fight. Stuart Alderoty clarified upcoming deadlines, noting that Ripple will respond to the SEC’s penalty requests by April 22, and the SEC will reply by May 6. This timeline marks crucial next steps in a case with legal implications and significant market impacts.

On the other hand, Ripple CEO Brad Garlinghouse remains committed to challenging the SEC’s claims to the highest courts. Ripple’s resolve is evident as it prepares to respond to the SEC’s demands for penalties, with deadlines set for the upcoming weeks.