SEC vs. Ripple Lawsuit Nearing End, Fate of XRP Uncertain

In the ongoing SEC v. Ripple case, the SEC filed its remedy-related opening brief on March 26, arguing that Ripple breached the Securities Act after the 2020 complaint. Ripple must file its opposition brief by April 22, and the outcome could significantly impact the penalty for selling unregistered XRP. Despite the SEC's adverse rulings, the SEC's plan to appeal the programmatic sales of XRP ruling remains an ongoing headwind for Ripple.

SEC vs. Ripple Lawsuit Nears Culmination, Impacts Ripple's Future Uncertain

In a significant development in the ongoing legal battle between the United States Securities and Exchange Commission (SEC) and Ripple Labs, the SEC has filed a redacted version of its remedy-related opening brief. This filing signifies the final stage of the lawsuit, which has been closely watched by the cryptocurrency industry and legal experts.

The SEC's brief contends that Ripple violated the Securities Act of 1933 by continuing to sell unregistered XRP tokens after the SEC filed its complaint in December 2020. Ripple is now required to submit an opposition brief to the SEC's remedy proposal by April 22, followed by a redacted version on April 24.

The upcoming filings will hold critical implications for Ripple. The April 22 filing could potentially determine the size of any penalty imposed on Ripple for selling unregistered XRP to institutional investors. Ripple must present evidence that it did not engage in such sales after the December 2020 complaint.

A failure to demonstrate that all XRP sales were directed exclusively to non-U.S. institutional investors could expose Ripple to a hefty $2 billion penalty. Furthermore, an adverse ruling could significantly hinder Ripple's business operations in the United States.

Adding to the uncertainty surrounding the lawsuit, the SEC also plans to appeal Judge Analisa Torres's July 2023 ruling on the programmatic sales of XRP. In her ruling, Judge Torres determined that such sales do not meet the criteria for a securities transaction under the Howey Test.

Despite the SEC's motion for an interlocutory appeal being rejected by Judge Torres in October, the SEC intends to pursue an appeal once the SEC vs. Ripple case concludes.

The ongoing legal saga has cast a shadow over Ripple's future. The company's ability to operate smoothly in the United States, as well as the potential for substantial penalties, hinges on the outcome of the case.

While the immediate future remains uncertain, the culmination of the SEC vs. Ripple lawsuit will undoubtedly shape the regulatory landscape for cryptocurrencies and set precedents for the industry moving forward.