Update on Ripple’s lawsuit against SEC on June 24

Needless to say, the dispute between the US Securities and Exchange Commission and Ripple Labs over whether or not XRP should be constituted as a security is one that will likely have ramifications for the entire industry.

The case has been developing for many years and is currently in the trial phase.

These are the most important developments of recent times.

Problems with the SEC?

As recently reported by CryptoPotato, the head of the Commission’s Crypto Asset and Cyber ​​Unit, David Hirsh, recently resigned.

Hirsh announced his resignation on LinkedIn. He had more than nine years of service with the SEC. He also denied rumors that he would be working for the crypto initiative pump.fun, saying that he will spend time with his family before entering the new chapter of his career.

That came days after the SEC reduced its demanded penalty from about $2 billion to $102.6 million.

This was in response to Ripple’s legal team, which demanded a reduced penalty amounting to no more than $10 million.

The SEC stated:

“Ripple avoids comparing the Terraform settlement penalty to the gross profit from the infringing conduct. This ratio ($420 million / $3.587 billion) is significantly higher: 11.7%. Applying this to the 876, $3 million in gross profits, the SEC is asking the court here to disburse it, resulting in a much larger figure, a penalty of $102.6 million, than the $10 million ceiling that Ripple is insisting on .

Fighting on multiple fronts

Ripple’s legal troubles don’t end with the case against the SEC. The company’s CEO, Brad Garlinghouse, is also involved in another lawsuit in California.

It has to do with the following statements he made years ago:

“I’m long XRP, I’m very, very long XRP as a percentage of my personal balance sheet. . . . (I’m not) long some of the other (digital) assets, because it’s not clear to me what the real utility is, what the problem is are really solving . there’s an expression in the industry to HODL. . . I’m on the HODL side.”

That case was allowed to go to trial, but the previous judge dismissed several allegations, including those suggesting Ripple violated federal securities law.

Ripple’s Chief Counsel said:

The CA judge dismissed all allegations suggesting that Ripple violated federal securities law. New York’s decision that XRP is not a security is not disturbed.

A state law claim, based on a 2017 statement, will go to trial. The plaintiff, who did not buy directly from Ripple and cannot say whether he even heard the statement before trading, allegedly lost a couple of hundred dollars. We look forward to this interrogation.

Garlinghouse also reiterated that this was a big win for the company and that he stands behind the statements he made in 2017.

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