According to U.Today, the U.S. Securities and Exchange Commission (SEC) has targeted Ripple's recently announced stablecoin, describing it as an 'unregistered crypto asset'. Ripple announced its dollar-backed cryptocurrency in early April, with the aim of bridging traditional finance with crypto. The stablecoin, which is set to be launched on both the XRP Ledger and Ethereum, is expected to be named in June, according to Ripple CTO David Schwartz.
The SEC has argued for a permanent injunction against Ripple, claiming that the company's business is largely based on the sale of XRP to On-Demand Liquidity (ODL) customers. Last year, U.S. District Court Judge Analisa Torres ruled that Ripple had violated security laws through direct sales of the XRP token to institutional investors. The SEC has accused Ripple of attempting to reargue summary judgment arguments.
The SEC has also emphasized that Ripple should pay a substantial penalty that 'punishes and deters'. Ripple had suggested a penalty of $10 million, but the SEC argued that this amount would not adequately penalize the company for its violations. The SEC's filing also noted that courts often impose penalties equivalent to the defendant's ill-gotten gains.
In response to the SEC's reply, Stuart Alderoty, Ripple's top lawyer, stated that Ripple was 'closer than ever' to resolving the lawsuit. He criticized the SEC for failing to apply the law faithfully and attempting to deceive the judge. Despite this, he expressed optimism about the lawsuit's resolution, although he acknowledged that many are just beginning their legal journey.
