In an update on the high-profile case between the Securities and Exchange Commission (SEC) and Ripple, debates intensify over the calculation of possible damages regarding the XRP cryptocurrency. Legal expert and commentator, MetaLawMan, sheds light on the SEC’s stance and Ripple’s counterarguments through his detailed analysis on X.
SEC’s Reliance on Controversial Precedent Raises Eyebrows
MetaLawMan pointed out that the SEC is using a past court decision from a case called SEC v. iFresh to support its argument. In that case, the court ruled that “pecuniary harm” (financial loss) occurs when stock prices rise beyond their true value The SEC claims a similar situation occurred with Ripple’s XRP, arguing that buyers who paid higher prices due to smaller discounts suffered financial harm.
However, MetaLawMan criticizes this approach, noting that the iFresh decision was marked “NOT FOR ELECTRONIC OR PRINT PUBLICATION,” a designation making it a questionable reference for such a case. He points out that this approach carries the least authority and was once considered improper to cite in legal arguments.
Also Read: Ripple vs. SEC: Lawyer Sheds Light on XRP Endgame
Ripple’s Defense: No Victims, No Disgorgement
Conversely, Ripple maintains that its XRP sales harmed no one, and therefore, there should be no imposition of disgorgement. In a previous tweet, discussed by MetaLawMan, Ripple emphasized the extensive investigations and discovery phases that failed to identify any institutional buyers who suffered losses from their XRP purchases. Ripple believes they should face a maximum fine of $10 million, far less than the $1.95 billion the SEC seeks.
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Show more +Implications for the Crypto Market and Legal Standards
This lawsuit holds importance for the cryptocurrency market and the legal treatment of digital assets. Moreover, Ripple is vigorously defending its case, emphasizing the debate over whether authorities should treat digital assets like XRP the same as traditional stocks. Besides, the SEC’s choice to rely on a weak precedent could influence the handling of similar future cases.
Hence, as lawyers submit the final briefs and the case progresses to Judge Torres for a decision, the outcome could establish a legal benchmark for the cryptocurrency industry. The resolution might not only affect Ripple and XRP but also set a precedent impacting other digital assets and their regulatory scrutiny.
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