TL;DR
The Ripple v. SEC case culminated in August when Judge Torres ordered the company to pay a $125 million fine for breaching certain securities laws. The penalty represented a substantial reduction of what the regulator initially asked for.
Donald Trump’s election victory and Gary Gensler’s announced resignation fueled optimism among XRP supporters, expecting pro-crypto leadership to influence the case’s resolution favorably.
The First Half of the Year
2024 has been quite eventful for the legal battle between Ripple and the US Securities and Exchange Commission (SEC). In the first months of the year, both entities filed various motions in preparation for the trial’s start.
For instance, the SEC requested Ripple to hand over essential documents such as the company’s financial statements for 2022 and 2023 and its post-complaint XRP sales contracts. The firm opposed the demand, maintaining that those records were untimely and unrelated to the case.
This caused the agency to re-submit the motion, claiming that the documents could offer essential insights into Ripple’s financial history and help determine if the company breached specific securities regulations. The firm reacted with a motion to file a sur-reply letter, seeking “to correct a significant factual mischaracterization made by the SEC.”
Eventually, Judge Sarah Netburn ruled in favor of the Commission, ordering Ripple to disclose its financial records for the years 2022-2023.
The two entities continued to submit documents and data until the beginning of the trial stage. As CryptoPotato reported, the legal proceedings between Ripple and the SEC reached that pivotal phase on April 23.
While many industry participants raised their hopes that this could be a sign of a soon-approaching settlement, the complexity of the court process and possible appeals from both sides mean that the case could be prolonged for a few more years. In May, the popular American attorney Jeremy Hogan claimed that the lawsuit had entered a stage with fewer developments, and both entities had to wait for the judge’s decision.
Ripple and the SEC continued to throw punches at each other, clashing over a key witness’ testimony and arguing about the potential size of the company’s fine for violating certain laws.
The watchdog sought a $2 billion penalty on the company, alleging it of conducting an unregistered securities offering by selling its XRP token. Ripple disagreed, insisting that the amount should not exceed $10 million. It compared its case to another legal battle between the agency and Terraform Labs, saying allegations of fraud are only present in the second lawsuit.
The Court’s Decision
In August, Judge Analisa Torres ordered Ripple to pay a $125 million civil penalty for violating federal securities laws through its institutional sales of XRP. It is worth mentioning that in the summer of 2023, the same magistrate found that the company’s programmatic sales of XRP to retail clients through centralized exchanges did not breach the rules.
Many industry participants viewed the August ruling as a huge victory for Ripple, considering that the fine represents just a fraction of what the SEC initially asked for. The company’s executives also seemed pleased. CEO Brad Garlinghouse said the firm respects the court’s decision, while CLO Stuart Alderoty stated the organization will pay the penalty in cash off its balance sheet.
Nonetheless, the SEC officially appealed in October, triggering a fresh doze of uncertainty. The action means that the lawsuit entered a new phase comprised of filings and a briefing process.
Donald Trump Comes to the Stage
Many crypto proponents cheered Trump’s victory in the US presidential elections (held on November 5). Those in favor of Ripple and its native token were also among the pack due to the Republican’s promise to fire the SEC’s Chairman Gary Gensler on day 1 after taking office.
Gensler has been in charge for over three years, during which time the agency has filed numerous lawsuits against crypto businesses.
While some doubted that Trump could fire him (since the SEC operates as an independent entity), the Chairman said he would resign in January next year. Moreover, the newly elected president of the States picked the pro-crypto Paul Atkins to succeed him.
The XRP Army expects the Commission’s upcoming leadership to take a less hostile stance toward the cryptocurrency industry and push the case against Ripple to a favorable resolution soon.
The post Ripple v. SEC Yearly Recap: Was 2024 the Most Important Year? appeared first on CryptoPotato.
