The US Security and Exchange Commission (SEC)’s losing streak in its ongoing lawsuit versus US fintech company and the creator of the XRP cryptocurrency Ripple Labs continued last week.
That’s according to a tweet by Ripple Labs’ Chief Legal Officer Stuart Alderoty, who said last Friday that “the 2d Circuit in SEC v Govil held that the SEC can’t ask for a crippling disgorgement award w/o (without) first proving that “investors” suffered actual financial harm”.
Another loss this week for the SEC – the streak continues. The 2d Circuit in SEC v Govil held that the SEC can’t ask for a crippling disgorgement award w/o first proving that “investors” suffered actual financial harm. In other words, no harm, no foul.
— Stuart Alderoty (@s_alderoty) November 3, 2023
In other words, the SEC can’t hit Ripple Labs with a huge fine unless they can prove that investors suffered significant financial harm, which, given the strong performance of the XRP cryptocurrency since its creation, will likely be very challenging to prove.
Optimism about Ripple’s winning momentum against the SEC could partially explain why XRP has been vaulting higher in recent sessions.
XRP was last trading just above $0.71, up more than 15% since Saturday.
Another reason that XRP could be pumping is technical momentum.
The cryptocurrency faced significant resistance in the $0.55 to $0.5850 area, but since breaking above this zone, doesn’t really face any real resistance until the yearly highs in the $0.95 area.
So while XRP has pumped 15% in the last two days, gains of more than 30% from current levels are well within the scope, assuming the broader crypto market keeps moving higher and optimism regarding the Ripple vs SEC lawsuit remains.
If Ripple Labs Ends Up Paying $20 Million, It’s a 99.9% Legal Victory
John E Deaton, a lawyer who closely follows the Ripple vs SEC lawsuit, chimed in to the conversation on X (formerly Twitter) started by Stuart Alderoty, claiming that anyone who has argued that the SEC got a 50-50 victory in the Ripple case earlier this year are 100% wrong.
Deaton was referring to a ruling by a judge in July that Ripple Labs’ sales of XRP didn’t necessarily break US securities law.
The decision “was more like 90-10 in Ripple’s favor,” he noted, adding that “if Ripple ends up paying $20M or less it’s a 99.9% legal victory”.
Not all of crypto community on X were in agreement.
According to Tierion CEO Wayne Vaughan, “victory against the SEC means you pay a small fine and live to see another day… It’s even better if you settle and don’t have to bear the expense of a long court case”.
Victory against the SEC means you pay a small fine and live to see another day. It’s even better if you settle and don’t have to bear the expense of a long court case.
— Wayne Vaughan (@WayneVaughan) November 4, 2023
Others, such as Crypto Advisor, complained that the SEC should pay compensation for the damage they caused to XRP investors.
The SEC should be paying #XRPHolders compensation for the damage they caused to our investments, based on their lack of faithful allegiance to the law
— Crypto Adviser (@Crypto__Advisor) November 4, 2023
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