Ripple Labs has significantly bolstered its defense against the U.S. Securities and Exchange Commission (SEC) by proposing a cap of $10 million as opposed to the SEC’s hefty $2 billion penalty demand. Andrew J. Ceresney of Debevoise & Plimpton LLP, who represents Ripple, outlined two pivotal arguments in a letter to Judge Analisa Torres with the aim of influencing the court’s perspective.
Why Is Ripple Opposing Financial Relevance?
Ripple’s defense hinges on the argument that the company’s current financial status should not influence penalties related to past actions. Ripple maintains that financial assessments made years after the alleged violations are irrelevant to the case. They emphasize that recent financial statements should not sway the court’s decision, citing legal precedents and advocating for the confidentiality of financial documents for private businesses.
What About Past Contracts?
Another critical issue is the SEC’s assessment of Ripple’s past contracts, which it deems outdated. Ripple’s CFO Jonathan Billich contends that since sales methods have evolved, current XRP sales do not mirror past conditions. Therefore, disclosing past contract terms could unfairly benefit future counterparties, making this information irrelevant.
Insights for Stakeholders
– Ripple argues that current financial status should not influence past penalties.
– Evolution in sales methods means past contracts may not reflect current practices.
– Public disclosure of XRP prices deemed irrelevant as the court ruled XRP is not a security.
Moreover, Ripple disputes the SEC’s claim that public disclosure of XRP prices is mandated under securities law, given that the court has already ruled that XRP is not a security. Ripple argues this renders past contract prices irrelevant to registered securities. As the legal tussle moves towards a resolution, Andrea Fox’s role as an expert witness awaits determination by Judge Torres.
Ripple’s detailed defense underscores its commitment to safeguarding its financial privacy and the confidentiality of past contracts. By underscoring the evolution of its sales methods and arguing that its current financial status is unrelated to past violations, Ripple aims to reduce penalties and shield its commercial interests. The outcome of this prominent case will significantly impact the cryptocurrency sector and the regulation of crypto assets. As events unfold, XRP is trading at $0.51.
