As an experienced financial analyst, I have closely followed the developments between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) with great interest. The recent exchange of filings has intensified the legal woes for Ripple, and the potential consequences for the company and its XRP token are significant.
The Securities and Exchange Commission (SEC) countered Ripple Labs’ additional arguments with objection to the SEC’s proposed penalties. SEC and former SEC lawyers argued that penalties from settlements are typically smaller than those imposed in litigated cases. This disagreement ignited discussions on possible remedies, leaving some to ponder if XRP‘s price may decrease further.
SEC Filing Intensifies Legal Woes For Ripple
The Securities and Exchange Commission (SEC) of the United States has contested Ripple’s arguments, claiming that the company incorrectly referenced previous settlements and calculated penalties based on the defendants’ total sales or profits. A supporter of XRP named Sherrie emphasized that the SEC made a compelling argument in the filing due to Terraform Labs being in bankruptcy, selling off all their cryptocurrency, and replacing crucial board members. In summary, the circumstances are quite distinct.
The SEC has stated that Ripple has yet to reach an agreement on a settlement, while Ripple herself is not making any concessions. Additionally, the SEC has disclosed potential elements of a substantial settlement in the Terraform lawsuit.
“Agreements from financially struggling defendants to repay victims promptly and stop their unlawful behavior do not aid in determining the appropriate penalties for a wealthy defendant who uncontested violated securities laws, disregards or denies the violation, and continues to generate wealth through conduct remarkably similar to the initial infringement.”
The U.S. Securities and Exchange Commission (SEC) has requested a court order for Ripple to pay a total of $1.98 billion, which includes $876.3 million in disgorgement, $198.15 million in prejudgment interest, and an identical civil penalty of $876.3 million. However, Ripple argues they are only liable for a maximum civil penalty of $10 million. According to the SEC’s latest submission, even if the penalty ratio is applied, the actual penalty amount would still exceed $102.6 million.
Ex-SEC Lawyers Challenge Ripple
As a legal analyst, I’ve previously noted that James Farrell and Marc Fagel, who have worked for the SEC in the past, have indicated that the Securities and Exchange Commission (SEC) could appeal Judge Torres’ summary judgment in the ongoing Ripple litigation. In their latest posts on X, they propose an alternative scenario where Judge Torres may need to issue an injunction that could significantly impact Ripple’s On-Demand Liquidity (ODL) business using XRP.
As a crypto investor, I’d rephrase it this way: I believe the SEC aims to follow the law despite Ripple’s assertion that they have altered their XRP On-Demand Liquidity (ODL) sales in response to the court’s warning. Torres can declare here’s the injunction, and if our ongoing sales are legal, there’s no harm for Ripple. They want her to make this decision, giving us some relief from the uncertainty hanging over their heads.
The public needs a clear understanding of the severity or extent of the fraud. Moreover, if a $10B fraud is only met with a proposed penalty of $10M due to lack of available funds, the SEC may face heavy criticism; it would be wiser for them to impose an uncollectible $10B penalty instead.
— Marc Fagel (@Marc_Fagel) June 15, 2024
XRP Price to Fall to $0.42?
As a crypto investor, I’m closely monitoring the price action of XRP. Currently, it’s hovering around a crucial support level, significantly below the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs), signaling a bearish trend. If the broader crypto market doesn’t recover due to intensifying selling pressure on Bitcoin triggered by miner capitulation, XRP’s price might plummet further, potentially breaching the downside of its current channel and targeting the next support at $0.42 (represented by the black line).
The current price of XRP is around $0.48, marking a significant increase of approximately 0.4% over the past 24 hours. The highest and lowest points during this period were $0.4802 and $0.4647 respectively. Notably, the trading volume has decreased in the last 24 hours.
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2024-06-15 15:34