Bill Morgan, a Pro-XRP lawyer, has shed light on a potential obstacle looming over Ripple amid its legal tussle with the SEC. In a recent statement, Morgan expressed reservations about the SEC’s stance, suggesting it could spell trouble for Ripple’s future.

Next Step In Ripple Vs SEC Case

Morgan pointed to the SEC’s allegations directed toward Ripple’s selective discounts to institutional investors that could have harmed those who did not receive them. Amid the Ripple vs SEC case, the latest brief by the regulatory agency this harm amounted to a significant $480 million. Hence, Morgan cautioned that this move could pose a “problem” for Ripple in the upcoming proceedings.

On the contrary, the lawyer asserted that the assumptions behind this figure require thorough scrutiny. “The evidence of causation of this alleged harm seems thin,” Morgan stated, underscoring the need for a closer examination of the SEC’s assertions. Moreover, the SEC argued that these discounted sales exerted downward pressure on XRP’s market price.

This potentially exposes the company to legal action from aggrieved institutional investors amid the Ripple vs SEC case. “The SEC’s assertions in the brief, and the evidence on which the assertions are based, must at least make possible the risk of legal action against Ripple,” Morgan emphasized, highlighting the gravity of the situation.

Morgan also raised concerns about the repercussions for Ripple’s reputation among institutional investors. He feared that the revelation of selective discounts could tarnish the company’s image. Additionally, the SEC’s classification of these sales as investment contracts implies that disclosure of such discounts would have been mandatory had the sales been registered.

Hence, it would raise questions about Ripple’s compliance with regulatory standards. While hinting at flaws in the SEC’s arguments, Morgan revealed that intends to delve deeper into the matter before addressing these issues directly.

Also Read: Breaking: SEC Asks Judge Torres for Final Judgment in Ripple XRP Lawsuit

SEC’s Appeal To Judge Torres

In the latest brief in the Ripple vs SEC case, the agency has brought to the attention of the federal court the breaches of securities laws committed by Ripple. urging the judge to authorize a final judgment against Ripple. The requested measures encompass permanent injunctions, disgorgement along with prejudgment interest, and civil penalties amounting to nearly $2 billion, as previously reported by CoinGape.

Executives at Ripple and members of the cryptocurrency community have criticized the SEC for what they perceive as baseless assertions in the remedies-related brief and other associated documents. They argued that the absence of any allegations pertaining to fraud or recklessness suggests a punitive stance against Ripple. It indicates a strategy to disrupt the ongoing bull run.

The SEC filed a public version of its remedies-related brief in court with redactions. Its main arguments are alleged violations of Section 5 of the Securities Act of 1933. These violations concern unregistered XRP offerings in institutional sales. Notably, the SEC’s stance refrains from alleging fraud, instead targeting Ripple’s expansion despite the ongoing litigation.

In its appeal to Judge Analisa Torres, the SEC seeks approval for an order mandating Ripple to disgorge $876,308,712. Additionally, it requests $198,150,940 in prejudgment interest and imposes a civil penalty of $876,308,712.

The SEC claimed that Ripple’s post-complaint XRP sales mostly catered institutional investors, alleging that these transactions have adversely impacted investors. Furthermore, the SEC accused Ripple of persistent violations of securities laws, misrepresentation of court rulings, and intentional evasion of compliance.

Also Read: XRP Lawsuit: Ripple CLO Slams SEC’s Soon-to-Be-Revealed $2B Fine

The post Ripple Vs SEC: Pro-XRP Lawyer Explains Aftermath Of $480M Allegation On Crypto Firm appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am