The simmering legal dispute between Ripple Labs and the US Securities and Exchange Commission (SEC) has gotten to a flashpoint. The argument revolves around the categorisation of XRP, the native cryptocurrency of Ripple, and the suitable fines for its claimed unregistered securities sale. Reacting forcefully, Stuart Alderoty, Ripple’s Chief Legal Officer, started the penalty discussion and cast questions on the verdict of the case.
Ripple: From Astronomical Fines To Discordant Negotiations
Initially seeking a shocking $2 billion in fines against Ripple, a number that rocked the bitcoin market, the SEC Ripple fiercely objected to this enormous amount, claiming XRP is not a security and so shouldn’t be under such control.
After negotiations, the SEC reduced their suggested fine to a still-substantial $102.6 million. Alderoty’s latest remarks, meanwhile, imply Ripple still rejects this offer.
The @SEC is raging. Ripple defended itself – “agreeing to nothing.” The court gave clarity that XRP is not a security. There are no “victims” to compensate. And worst of all for the @SEC, Ripple is thriving. But at least @SEC seems to have abandoned its absurd demand for $2B. https://t.co/KVSkB9OqlH
— Stuart Alderoty (@s_alderoty) June 15, 2024
Alderoty termed the SEC’s approach “raging” and underlined that ripple had no effect on investors. He underlined even more the lack of fraud accusations in Ripple’s case, juxtaposing it with the recent Terraform Labs settlement in which the SEC obtained $4.47 billion despite the company’s bankruptcy.
A Precedent-Setting Battle With Industry-Wide Repercussions
For the developing bitcoin sector, the court’s ruling on the suitable fine will be historic. A substantial penalties for Ripple might set a standard for tougher SEC rules on unregistered securities considered cryptocurrency.
This might so impede innovation and slow down the expansion of the crypto market. On the other hand, a light punishment could be seen as a lack of enforcement muscle from the SEC, therefore fostering a Wild West situation in the cryptocurrency field.
Alderoty might have been negotiating with the SEC to accept a settlement less than Ripple’s demanded $10 million using his strong language as a chip. On the other hand, it could indicate Ripple’s will to fight the matter all the way to court, therefore sparking a protracted legal dispute maybe spanning years to be resolved.
A Glimmer Of Hope, Or A Negotiation Tactic?
The notable drop in the proposed penalty from $2 billion to $102.6 million points to some possible compromise space. The court may finally decide on a number midway between both sides, therefore allowing some compromises.
Accusations of emotional prejudice have taken the stage as Ripple and the SEC keep their legal fight under way. Though Ripple’s strong posture and Stuart Alderoty’s criticism of the SEC’s “raging” approach suggest deeper tensions, the drop in the SEC’s penalty demand from $2 billion to $102.6 million points at compromise.
Featured image from Leon’s Existential Cafe, chart from TradingView
