The legal battle between Ripple and the United States Securities and Exchange Commission (SEC) has taken a new turn. Indeed, a request for a stay of judgment has just rekindled the debate around the regulation of cryptocurrencies. This joint request filed by Ripple following an agreement with the SEC relates to the postponement of the payment of the $125 million penalty.
The request for suspension of the monetary sanction
In a new motion filed on September 4, 2024, in the Southern District Court of New York, Ripple’s attorneys requested a stay of the monetary portion of the judgment entered on August 7, 2024. That judgment required Ripple to pay $125 million to the SEC. According to court documents, Ripple is offering to deposit 111% of that amount, or about $139 million.in a bank account that is frozen until 30 days after the appeal period expires. Brad GARLINGHOUSE, Ripple’s CEO, had initially called the August court ruling a “victory for Ripple.” Stuart ALDEROTY, the company’s chief legal officer, had said Ripple would comply with the $125 million fine. The about-face appears to indicate a strategic retreat.
The stay request is important in several ways. On the one hand, it allows Ripple to maintain liquidity in order to extend the legal response time. On the other hand, the agreement with the SEC to delay payment after September 6 shows a willingness to conciliate on the part of both parties. The decision of Judge Analisa TORRES, still pending, will determine whether this postponement is granted.
The implications of a call and market reactions
If the SEC decides to appeal, the stay of the judgment could significantly extend the duration of the litigation. An appeal could potentially reevaluate the question of whether XRP, the cryptocurrency issued by Ripple, qualifies as an unregistered security.
An “extension” could provide the SEC with an opportunity to sharpen its legal arguments and strengthen its position against other industry players who may use similar cryptos to raise funds. Ripple, too, could use this opportunity to shore up its defense and garner broader support within the crypto community.
The legal battle between Ripple and the SEC continues. The outcome of this stay request could well influence the future of crypto regulation in the United States. If the court grants this request and the SEC decides to appeal, it would prolong an already complex case. For Ripple, it is a question of survival and long-term strategy. For the SEC, it is an opportunity to reassert its authority in a booming market.
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