SEC files final response in XRP lawsuit, rejects Ripple’s claims

The United States Securities and Exchange Commission (SEC) has filed its final response to its ongoing lawsuit against Ripple.

According to the filing, the commission denied Ripple’s allegations that it was careless in its use of the XRP cryptocurrency.

The regulator noted that the court had previously rejected Ripple’s “fair notice” defense despite the firm’s claim that there was no “widespread uncertainty” regarding the legal status of XRP.

Additionally, the SEC highlighted Ripple’s attempts to minimize its liability by highlighting its cooperation with regulatory authorities since XRP’s initial coin offering in 2013. However, the regulator argued that Ripple’s compliance did not eliminate the possibility of future breaches.

The filing added that Ripple’s claims to restructure future XRP sales and comply with legal advice are misleading and do not accurately reflect judicial orders. He argued that Ripple misinterpreted these orders and underestimated the compliance consequences.

The SEC also rejected Ripple’s defense of XRP sales and accredited investors outside the US. The Commission noted that these claims were not sustained during summary judgment.

Moreover, the commission also rejected Ripple’s revisions to its on-demand liquidity sales contracts, stating that these revised contracts still lack the necessary restrictions and therefore continue to pose legal risks.

As a result, the SEC argues that the potential for future breaches exists, despite Ripple’s assurances and no recent breaches. Therefore, he argues that this possibility justifies the need for injunctive relief to ensure Ripple’s compliance.

The agency’s response was not well received by the crypto community; Ripple’s chief legal officer, Stuart Alderoty, criticized the approach.

According to Alderoty, the SEC’s actions could be confusing to other financial regulators that have established or are working to establish a regulatory framework for the crypto industry.

“If you are a financial regulator outside the US and have done the hard work to create comprehensive crypto licensing frameworks, know that the SEC does not respect you and thinks you are handing out the equivalent of fishing licenses,” he wrote.

On April 23, Ripple appealed the SEC’s $1.95 billion penalty imposed on institutional sales of XRP. The regulator proposed $876 million in damages, $198 million in pre-judgment interest and a fine of $876 million.

However, Ripple claimed that the fine could not exceed $10 million.