The post XRP Lawsuit Update: Ripple’s CLO Hits Back at SEC Over ‘Unfair’ Enforcement Practices appeared first on Coinpedia Fintech News
The U.S. Securities and Exchange Commission has submitted its final remedies brief in reply to Ripple Labs’ brief. The filing is completely focused on the need for permanent injunctions and disgorgement. SEC’s stab at Ripple has made its Chief Legal Officer, Stuart Alderoty, lash out at X, critically questioning the SEC’s commitment to fair application of the law.
This final court filing lays out the SEC’s case for stricter penalties, while Ripple argues that the SEC’s demands are disproportionate.
SEC’s Argument for Injunctions
In its remedies-related final brief, the SEC argues the need for “permanent injunctions” as there is a “reasonable likelihood” of Ripple repeating its wrong will be repeated.
The SEC stabs at Ripple, contending that even after 3 years of the lawsuit, Ripple’s primary business “continues to be, as it has been since 2013, unregistered sales of XRP.” Taking this as a point, the SEC argues that even if Ripple had not committed a single violation since 2020, another violation could still ‘be anticipated’.
In the preceding remedies-related brief submitted by Ripple, the company asserted that it had made necessary changes in its business model to avoid future violations.
However, the SEC counterargues this claim, stating that “Ripple’s first ‘assurance’ is not even an actual assurance—it is instead another attempt to relitigate summary judgment arguments.” The SEC’s latest remedies brief seems to point fingers at the company, lashing out that any changes made by Ripple are nothing more than “misreading or ignoring what the Order says.”
All these make the basis of the SEC’s argument to impose a permanent injunction on Riple Inc. from operating its business.
Furious CLO Criticizes SEC’s Approach
Criticisms flushed in after the SEC’s remedies-related brief went public, with Stuart Alderoty, Ripple’s Chief Legal Officer, reacting sharply to the SEC’s final remedies brief.
On X, Alderoty remarked, “More of the same from the SEC—failing to apply the law faithfully and trying to pull the wool over the Judge’s eyes.”
Alderoty also criticized the perceived disrespect from the U.S. SEC towards international regulatory frameworks.
He wrote, “And just when you think the SEC can’t sink any lower if you are a financial regulator outside the U.S. and have done the hard work of establishing comprehensive crypto licensing frameworks, know that the SEC has no respect for you and thinks you are handing out the equivalent of fishing licenses.”
Financial Stakes and the Upcoming Ruling
In its final brief, the SEC made it clear that it is not backing down from the $2 billion demand for penalties and fines. Out of this crazy amount, the SEC used the millions of profits claimed by RIpple from its unregistered sales of XRP as the reason for disgorgement.
The SEC asserts that Ripple’s arguments against disgorgement are meritless, stating, “The SEC has shown that Ripple’s violation—its failure to provide statutorily mandated disclosures about pricing and discounts—caused pecuniary harm because some institutional investors paid more than they would have had they received all required information.”
On the other hand, Ripple’s last brief proposed a significantly lower penalty amount, suggesting that a fine under $10 million would be more appropriate. It claimed that the SEC’s demands were way too excessive.
Nonetheless, Ripple’s CLO, Mr. Alderoty, has expressed hopes of Ripple’s progress in resolving the lawsuit. What is left is for Judge Sarah Netburn to review the briefs and pass the final court ruling that will determine whether the SEC’s injunctions and disgorgement claims are upheld, or a settlement as precedent for future enforcement actions in the crypto industry.