Regulation
Ongoing legal battle intensifies with new allegations
In progress Ripple versus SEC saga, each day brings a new twist, leaving the XRP community eagerly awaiting the resolution. Ripple argues that the SEC is expanding its regulatory reach over cryptocurrency using vague laws, while the SEC opposes what Ripple sees as manipulative tactics and unfair measures.
Stuart Alderoty, Ripple’s (CLO) chief legal officer, recently criticized the SEC’s handling of the XRP case, highlighting what he sees as unfair practices and broader challenges facing the XRP industry. cryptography.
Now, what is the new drama about? We won’t keep you waiting. Dive right in.
Allegations of unfair conduct
After a long battle with the SEC, Alderoty found intriguing parallels between the SEC’s actions and the absurdities depicted in Franz Kafka’s novel, “The Trial,” accusing the regulator of engaging in illegal activities. Ripple says the SEC’s approach lacks transparency and fairness, echoing sentiments shared by other cryptocurrency giants like Robinhood and Coinbase.
Understanding Ripple’s smart legal strategy
To protect its interests, Ripple has filed motions to seal sensitive financial documents before making them public. These documents contain crucial information about profits, revenues, expenses, and the discounted rates at which XRP was sold to institutional investors. Ripple claims that disclosing such sensitive data would not only jeopardize its business interests but also compromise privacy.
Debating the $2 Billion Demand
At the heart of the case is the SEC’s demand to impose colossal $2 billion in penalties on Ripple for allegedly selling XRP to institutional investors. However, Ripple’s legal team strongly disputes this request, arguing for a cap of $10 million for any civil penalty.
They argue that the SEC’s request is excessive, especially considering the lack of customer loss, and insist that Ripple should not be forced to pay such a large sum through illegal means.
Regulation remains a pressing concern
Alderoty’s criticism highlights the broader tensions between regulatory enforcement and business operations in the cryptocurrency space. Ripple, along with other crypto entities, are grappling with what they perceive as inconsistent comments from the SEC, complicating their efforts to comply with regulatory mandates.
Ripple’s legal battle has also highlighted the US government’s efforts to rein in the SEC’s regulatory authority. Alderoty welcomes bipartisan initiatives in the House of Representatives aimed at reducing the influence of the SEC over the regulation of cryptocurrencies.
Notably, the House recently voted to rescind the SEC’s Staff Accounting Bulletin No. 121 (SAB 121), which requires financial institutions to include customers’ cryptocurrency holdings on their balance sheets.
Implications for the crypto industry
The showdown between Ripple and the SEC has significant implications for the broader cryptocurrency landscape. Notably, the SEC’s scrutiny of Ripple’s future stablecoins sheds light on its regulatory intentions, with potential implications for the regulation of digital assets as a whole.
Finally, Alderoty’s claims against the SEC are clear and significant. The SEC’s success will negatively impact the crypto market as labeling XRP as a security will burn many other assets awaiting similar judgments.
Read also: Ripple awards $1.05 million to Morgan State for blockchain research
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