Ripple Labs and the United States Securities and Exchange Commission (SEC) have made significant progress in their ongoing legal battle, as the SEC filed its final response in the remedies stage of the lawsuit.
In its recent reply to the remedies brief, the SEC challenged Ripple’s claim that it acted without recklessness and that there should be no uncertainty regarding the legal status of XRP, despite the court previously rejecting this defense. The SEC also maintains its stance on the likelihood of Ripple engaging in similar actions in the future, even though no violations have occurred since the lawsuit began in 2020.
According to the remedies brief, Ripple has tried to downplay its liability while emphasizing its cooperation with the SEC since its initial coin offering of XRP in 2013. However, the SEC emphasizes that even if Ripple has refrained from violations since 2020, there is still a possibility of future breaches.
The SEC argues that Ripple’s assurances of changing its behavior post-lawsuit do not justify avoiding injunctions. It claims that Ripple misinterprets the court’s order and fails to fully accept its implications for compliance.
Ripple’s assertions about conducting sales outside the U.S. and to accredited investors are refuted in the SEC’s reply, as these defenses were abandoned during the summary judgment. Additionally, Ripple’s claims of contract changes for on-demand liquidity sales are dismissed, as these contracts already lacked certain restrictions that were identified as violations.
Ultimately, the SEC argues that Ripple’s assertions do not negate the need for injunctions to prevent future violations.
In response to the SEC’s reply, Ripple’s chief legal officer, Stuart Alderoty, criticized the SEC for its inconsistent application of the law. He expressed optimism about resolving the XRP lawsuit and noted that international financial regulators with strong crypto licensing frameworks might be surprised by the SEC’s approach.
The outcome of the case is eagerly awaited by the crypto community, with analysts anticipating a final judgment around September.
Ripple is also planning to introduce its XRPL enterprise solutions to the Japanese market through a strategic partnership with Tokyo-based consulting firm HashKey DX.