The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has entered a crucial phase, with Judge Sarah Netburn setting a new schedule for the motion for remedies and final judgment. According to attorney James K. Filan, the SEC must respond by April 29, and Ripple will have three business days to reply afterward.
The schedule is related to Ripple’s attempt to dismiss the SEC’s latest expert evidence, which is intended to support its argument for penalties and a definitive ruling. Judge Netburn, who was recently appointed as District Judge in the Southern District of New York, remains the presiding judge in the case.
Judge Netburn had a favorable stance towards XRP
“My understanding about XRP is that not only does it have a currency value, but it has a utility, and that utility distinguishes it from bitcoin and ether,” the judge said in 2021 (according to attorney Jeremy Hogan).
Ripple has contested the SEC’s call for significant monetary penalties, proposing a cap on penalties at $10 million. The blockchain payments firm argues that the SEC’s allegations are baseless and lack adequate evidence. Bill Morgan, Ripple’s representative, has consistently argued that Ripple On-Demand Liquidity (ODL) sales do not constitute investment contracts. According to Morgan, the nature of ODL transactions is distinct from traditional investments.
Ripple emphasizes that the SEC hasn’t proven any likelihood of future violations or reckless disregard in its XRP sales and cites the Govil case to dispute the SEC’s disgorgement claim, highlighting the lack of financial harm evidence. Attorney Jeremy Hogan recently predicted that the lawsuit could conclude by this summer, with a settlement of $100 million.
The SEC had previously demanded a $2 billion fine from Ripple, citing violations in certain XRP sales. However, Ripple countered by asserting that XRP should not be classified as a security, arguing that it does not fall under the SEC’s regulatory scope. Stuart Alderoty, the chief legal officer at Ripple, presented several key reasons why the penalty should not exceed $10 million.
The outcome of this legal battle could have significant implications for the cryptocurrency industry, as it could set a precedent for how regulators classify and treat digital assets. Ripple and its supporters argue that a victory in this case could help clarify the regulatory landscape and promote innovation in the space.
