Key Updates in Ripple vs. SEC: Get Ready for a Long Battle Ahead!

Well, folks, if you thought the SEC vs Ripple case was over, you couldn’t have been more wrong!

The lawsuit continues to drag on, with no end in sight. The battle has revealed deep divisions within the cryptocurrency industry, and the stakes are high for both sides.

Australian lawyer Bill Morgan, who has been closely following the case, has shed light on the intricate nature of the forthcoming remedies phase. He warns that this phase could be even more complex and time-consuming than the trial itself.

SEC’s Stance

In a letter submitted to the court, the SEC has made it clear that they anticipate a prolonged and heavily disputed remedies phase.

Moreover, they are eyeing “additional fact and expert discovery on the issue of disgorgement.” This indicates that the regulatory body is not just looking for a quick settlement; they are gearing up for an exhaustive inquiry that deepens into Ripple’s institutional offers and sales.

Read More: Ripple vs. SEC: $770M Penalty in Question, but Is a Settlement in Sight?

Ripple’s Counterplay

Ripple, in response, has outlined three key areas they plan to address in their letter to the court:

1. Defining Institutional Sales Ripple seeks to establish a more precise definition of which of their offers and sales should be categorized as institutional. They question the SEC’s broad classification of all sales as institutional, implying that this might be an overreach.

2. Jurisdictional Challenge Ripple throws a curveball by challenging the SEC’s jurisdiction, arguing that many transactions took place outside U.S. borders, thus falling beyond the SEC’s regulatory reach.

3. Post-complaint Sales to ODL Customers The issue of post-complaint sales to ODL (On-Demand Liquidity) customers for cross-border payments remains a significant point of contention. These sales serve sophisticated commercial entities, concluding in mere seconds, in stark contrast to the typical characteristics of investment contracts.

According to Ripple, ODL transactions don’t fit the mold of investment contracts as they don’t align with the traditional profit-generation expectations. This distinction carries substantial financial implications, potentially surpassing the figures mentioned in the SEC’s initial complaint.

The Road Ahead

Bill Morgan’s tweet raises an important question: can this case be resolved easily? While writing a check may appear to be a straightforward solution, it seems increasingly improbable given the intricate complexities and high stakes involved.

With both parties digging their heels in for the remedies phase, the case’s resolution remains uncertain, affecting not just Ripple and its ODL clients but potentially rewriting the rules of engagement for cryptocurrencies in the U.S.

Also Read: SEC vs. Ripple: What to Expect Next in the Remedies Phase?