SEC Demands $770 Million Penalty from Ripple After Legal Battles

The U.S. Securities and Exchange Commission (SEC) is demanding a $770 million penalty from Ripple for violating securities laws. After losing several legal battles against the crypto firm, the SEC wants to hold Ripple accountable with a significant financial penalty. Crypto lawyer John Deaton described the SEC’s stance as being “pissed and embarrassed,” and believes that the penalty phase will require extensive legal proceedings, potentially lasting a full year. The outcome of the SEC’s lawsuit against Coinbase is also expected to impact the final amount that Ripple will have to pay. However, Deaton predicts that Ripple will spend significant sums on legal fees to greatly reduce the $770 million penalty figure.

SEC Demands $770 Million Penalty from Ripple After Legal Battles

The U.S. Securities and Exchange Commission (SEC) has requested that Ripple pay a substantial penalty of $770 million for violating securities laws. This comes after the SEC suffered multiple losses in legal battles against the cryptocurrency firm. According to crypto lawyer John Deaton, the SEC is “pissed and embarrassed” over these defeats.

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SEC Wants $770M From Ripple

John Deaton, a prominent crypto lawyer, has revealed that the SEC is seeking a penalty of $770 million from Ripple for its alleged violations of securities laws. This demand comes in the wake of the SEC’s unsuccessful attempts to secure legal victories against the company.

Legal Battles Against Ripple

The SEC’s pursuit of the $770 million penalty is a result of its numerous legal battles with Ripple. Recently, the regulator dropped charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen, indicating a setback for the SEC. Additionally, District Judge Analisa Torres rejected the SEC’s attempt to appeal her ruling on XRP, further strengthening Ripple’s position.

Dropped Charges Against Ripple Executives

In a significant development, the SEC decided to dismiss the charges against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. This decision highlights the regulator’s failure to build a strong case against these Ripple executives, thus boosting Ripple’s chances of mitigating the penalties it may face.

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Judge’s Ruling on XRP

District Judge Analisa Torres delivered a ruling concerning XRP that favored Ripple. The judge rejected the SEC’s bid to appeal her decision, which further weakened the SEC’s position in its legal battles against the cryptocurrency firm.

SEC’s Monetary Demand

The SEC’s demand for a $770 million penalty reflects its determination to hold Ripple accountable for its alleged securities law violations. This substantial figure underscores the significance of the SEC’s accusations against Ripple and indicates the regulatory body’s commitment to pursuing strict enforcement measures.

Lengthy Penalty Phase

John Deaton, the crypto lawyer, has emphasized that the penalty phase of this case will be lengthy and arduous. It will involve extensive document requests, depositions, and other legal procedures. Based on his insights, a final judgment from Judge Torres may not be expected until late summer or later, and the entire appeals process could take up to a year to conclude.

Potential Impact of Coinbase Lawsuit

Deaton believes that the outcome of the SEC’s lawsuit against Coinbase, a prominent cryptocurrency exchange, will have a significant impact on the amount Ripple will eventually have to pay as a penalty. If Coinbase succeeds in its motion-to-dismiss (MTD), the SEC will likely be compelled to reconsider its anti-crypto stance and potentially seek a settlement with Ripple. However, if Coinbase does not prevail in its MTD, a settlement is unlikely.

Anticipated Outcome of Coinbase Lawsuit

The oral argument for Coinbase’s motion is scheduled for January 17, 2024. A ruling is expected to be issued within 60-120 days after the argument. Deaton suggests that until this outcome is determined, Ripple will need to allocate substantial financial resources to cover its legal fees in order to rigorously reduce the proposed $770 million penalty.

Oral Argument on Coinbase Motion

The oral argument for Coinbase’s motion will play a pivotal role in shaping the future of Ripple’s legal battles with the SEC. This argument will provide both sides with an opportunity to present their case and support their claims. The outcome of this argument will heavily influence the course of the SEC’s lawsuit against Ripple and the subsequent developments.

Reducing the $770 Million Penalty

Deaton is optimistic about Ripple’s prospects of significantly reducing the $770 million penalty. He insists that this is not a fraud case and instead aims to establish an appropriate fine for Ripple’s involvement in unregistered securities transactions within the context of a new asset class, categorized as “virtual currencies” by other federal agencies. This nuanced perspective supports Ripple’s argument for a reduced penalty and a fair resolution to the case.

In summary, the SEC’s demand for a $770 million penalty from Ripple comes after a series of legal battles and defeats for the regulatory body. The ongoing penalty phase, the outcome of the Coinbase lawsuit, and the prospects of reducing the penalty all contribute to the complexity and uncertainty surrounding the future of Ripple’s legal challenges. As the case progresses, both Ripple and the SEC will continue to fight for their respective positions, all while shaping the evolving landscape of cryptocurrency regulation.

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