Ripple’s Legal Fight with the SEC Over Claims Made by Institutional Investors Heats Up


The legal dispute that Ripple was having with the Securities and Exchange Commission (SEC) of the United States became more intense.

The central issue was the assertion that Ripple engaged in unfair discrimination against certain institutional investors when selling XRP via the On-Demand Liquidity platform.

The accusation that Ripple was running an unregistered securities offering in December of that year sparked the legal fight.

Current attention is on Ripple’s purported concealment of discounts extended to some institutional investors, which the SEC asserts may have caused injury to other investors.

The Second Circuit Court of Appeals’ judgement in the Aron Govil case provides a significant boost to Ripple’s defense.

According to this ruling, the SEC cannot demand a refund of profits from a seller if the buyer has not incurred any financial loss.

According to Stuart Alderoty, chief legal officer of Ripple, this ruling is a good indicator that Ripple may be able to win its continuing court struggle with similar results.

Bill Morgan, a legal expert, agrees and says that Ripple has a good chance of proving the SEC wrong if it can show that no institutional investors lost money.

According to the SEC’s reasoning for disgorgement, which means taking back gains from these purchases, Ripple earned $991 million in revenue and spent slightly less than $115 million on these transactions.

Morgan stresses that the question is not whether individual investors lost money, but rather if other institutional investors were unable to get better terms due to the concealment of discounts.

This strategy questions the SEC’s injury definition by shifting the emphasis from actual monetary loss to the prospect of lost opportunity.

Clearer cryptocurrency legislation may be necessary, and the results of the judicial processes may influence future approaches to digital asset regulation.

This lawsuit establishes precedents that may impact the crypto industry’s future and highlights the conflict between new technology and established legal systems.

Also Read: Coinbase Takes on the SEC in a Battle Over “Investment Contracts”

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