US SEC Filing Final Reply in Ripple XRP Lawsuit

The securities watchdog in the US has submitted the final response to the lawsuit involving Ripple Labs. The Securities and Exchange Commission (SEC) submits that the claims levelled by Ripple do not erode the need to enforce injunctions that seek to avert future violations. 

The filing by the Gary Gensler-led Commission illustrates significant progress towards resolving the prolonged legal battle against Ripple Labs. The SEC filing within the suit’s remedies stage challenges the defendant’s argument to negate possible injunctions. 

SEC Challenges Ripple’s Insistence of Compliance

The SEC’s recent response counters the blockchain startup’s insistence that its actions were without recklessness. The SEC questions Ripple’s arguments to downplay the uncertainty regarding XRP’s legal status despite the court dismissing the “fair notice” defence earlier.

The SEC reiterated its stance, expressing uncertainty about whether Ripple can act similarly. Ripple Labs has yet to contravene any rules since the Commission filed the XRP suit in 2020; it cannot rule out violations in future. 

The scrutiny of the remedies brief reveals an attempt by Ripple to downplay the liability by illustrating its sustained cooperation with the Commission. Ripple has highlighted devotion to SEC guidelines since the XRP’s initial coin offering (ICO) in 2013. 

Nonetheless, the Commission indicates that while Ripple has refrained from contravening the law since 2020, it could breach it.  The SEC submits that the assurance by Ripple Labs regarding conduct after the lawsuit hardly justifies grounds to avoid injunctions. 

SEC faults Ripple Labs’ arguments of compliance with the legal guidance and restructuring of subsequent XRP sales relative to the lawsuit’s order. The Commission contends that Ripple Labs was misinterpreting the lawsuit order and dismisses the implications for its compliance. 

Ripple Labs’ Arguments Insufficient to Negate Injunctions

The SEC’s response dismisses assertions by the defendant regarding sales executed outside the US and targeting accredited investors. The agency illustrates that such defences were denied during the summary judgment. 

SEC points out that the claims of Ripple deploying contract changes for the on-demand liquidity sales were dismissed, too. The contracts already lack restrictions whose absence is regarded as a violation. 

The SEC concludes by faulting Ripple Labs’ assertions as insufficient to negate the injunctions the watchdog considers necessary to avert future violations. 

Ripple Labs’ chief legal executive Stuart Alderoty tore into the SEC’s reply. The legal expert indicated that the Gensler-chaired SEC is eroding its reputation. 

Alderoty warned that the SEC’s response is surprising to other international financial regulators that deploy comprehensive and robust crypto licensing frameworks. The executive regrets that the SEC was relating its efforts to the issuance of fishing licenses. Alderoty faults the SEC for failing to apply the law and attempting to pull the wool over the eyes of the Judge. He affirms his trust in the court and hails the milestone realized towards the closure of the case.  

Ripple Labs Closer to Conclude Legal Battle

Alderoty indicates that the Gensler-led SEC needs to apply the law consistently. The legal executive is optimistic that the remedies brief signals that Ripple Labs is closer to resolving the XRP case.

The crypto community eagerly awaits the outcome of the SEC versus Ripple Labs. However, the analysts consider September the opportune period for the final judgment.

Meanwhile, the ongoing case is not slowing down Ripple Labs. Recently, Ripple affirmed plans to unveil the XRPL enterprise solutions targeting the Japanese market. The firm hailed the strategic partnership established with the Tokyo-headquartered HashKey DX – a consulting specialist.