SEC Withdraws Charges, But What’s Next?

• The SEC has rescinded its charges against Ripple executives, Chris Larsen and Brad Garlinghouse.
• Ripple now faces the remedies phase concerning the alleged violation of securities laws with XRP sales.

Unpacking the Recent Ripple and SEC Developments

In an unfolding legal saga that has captured the crypto community’s attention, the U.S. Securities and Exchange Commission (SEC) has decided to back down from its pursuit of Ripple‘s top brass. With the charges against the executives dropped, the slated April 2024 trial stands cancelled.

Addressing Ripple’s Alleged Infractions

The spotlight has now shifted to address Ripple‘s purported contravention of securities regulations. The company stands accused of marketing over $700 million worth of XRP to institutional entities. The forthcoming remedies stage aims to ascertain suitable punitive measures for these alleged breaches.

A recent court update signifies the impending collaboration between the SEC and Ripple Labs. Both entities are slated to propose a briefing itinerary concerning remedies by November 9, 2023.

The next phase in the Ripple case pic.twitter.com/MX9A1M982e

— bill morgan (@Belisarius2020) October 19, 2023

Anticipating Legal Fireworks

Eleanor Terrett, a seasoned Fox Business journalist with a finger on the pulse of the SEC v. Ripple dispute, elucidated potential legal escalations via X (previously known as Twitter). Terrett forecasts heightened litigation during the remedies process.

🚨SO, what are next steps in the @Ripple case?

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Now that the @SECGov has dropped the charges against @bgarlinghouse and @chrislarsensf, expect to see some more litigation in the penalty phase between the two parties in regards to the appropriate penalty for Ripple‘s $700M+ of… https://t.co/4jJAzKtTjp

— Eleanor Terrett (@EleanorTerrett) October 19, 2023

The seasoned journalist hinted at potential wrangling over the magnitude of Ripple‘s financial penalty. Drawing from insider perspectives, Terrett emphasized that while Ripple might negotiate a reduced fine, the SEC would likely push for a heftier sum to bolster its regulatory stature.

Furthermore, despite past rejections, the SEC retains the right to contest specific decisions made by Judge Analisa Torres post the penalty phase. Specifically, they might contest the judge’s ruling that deemed Ripple’s XRP sales and distributions as non-securities.

A Tumultuous Legal Odyssey

Terrett underscored the importance of these recent shifts, framing them as significant victories not only for Ripple but for the broader crypto sector. This case has seen the SEC grappling with several setbacks. Notably, their attempts to shield the Hinman documents – drafts of William Hinman’s 2018 crypto speech – were thwarted.

Moreover, the court’s July 13 summary judgment granted Ripple a tentative win, negating the SEC’s characterization of Ripple‘s XRP sales as securities offerings. This wasn’t the SEC’s only defeat in the crypto realm; their decision regarding Grayscale Investments also faced opposition, prompting a review of Grayscale’s Bitcoin Trust conversion to a spot Bitcoin fund.

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