The SEC has filed its final response, asserting that Ripple acted recklessly in its unregistered sales of XRP tokens.
Ripple has maintained that it acted without recklessness and contends that there should be no “widespread uncertainty” about XRP’s legal status, despite the court previously rejecting this “fair notice” defense.
#XRPHolders 🚨🚨 #Ripple Vs #Sec Judgement Is Closer Then You Think Says #Ripple Chief Legal Officer. #XRP 💥💥🚀 pic.twitter.com/tHp6vsI7Ey
— XRP CAPTAIN (@UniverseTwenty) May 8, 2024
Injunction Request and Key Arguments
The SEC’s response emphasized that the central question is whether there is a reasonable likelihood that Ripple’s “wrong will be repeated,” quoting previous judgments, including SEC v. Mgmt. Dynamics, Inc. and SEC v. Lorin. Ripple acknowledged it had been found liable for a violation that occurred over many years, which the SEC sees as an indicator of high likelihood of repetition. According to the SEC, Ripple’s ongoing business places it in a position where “violations could be anticipated,” citing prior cases as precedent.
Ripple’s primary business model continues to be the unregistered sales of XRP tokens. The SEC referenced a recent press release where Ripple announced plans to issue a new crypto asset, which the agency fears could repeat the pattern of unregistered sales. Additionally, the SEC highlighted that the court found Ripple’s On-Demand Liquidity (ODL) Institutional Sales up to 2020 unlawful.
Challenging Ripple’s Defense of Non-Recklessness
Ripple’s opposition relied on arguments that have previously been rejected by the court, including the notion of “widespread uncertainty” about securities laws. The SEC maintained that Ripple “continues to maintain that its past conduct was blameless,” illustrating that Ripple could potentially repeat the violation.
The SEC also criticized Ripple’s assertion that its 2013 communication with the SEC demonstrated compliance. Ripple provided the agency with information about its business, but the SEC contends this communication was vague and insufficient to absolve Ripple of future accountability.
Ripple’s Legal Advice Argument
Ripple also claimed that it acted based on legal advice it received in 2012, but the SEC argued that Ripple did not heed these warnings and proceeded to target investors while promoting XRP as an investment. The SEC alleges that Ripple disregarded the advice against selling to investors and failed to seek “no action” relief, instead opting to proceed with sales that the SEC believes violate securities laws.
Amid the legal dispute, XRP has experienced notable volatility in its market performance. At the time of writing, XRP’s price is $0.5202, reflecting a 2.85% decrease over the past 24 hours and a 5.24% increase over the past week. XRP’s market cap stands at approximately $28.75 billion, driven by its circulating supply of 55 billion XRP tokens.
