Ripple's legal battle with the SEC enters final stages, outcome expected in September.

Since 2020, the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has reached a critical juncture, with the SEC filing its final rebuttal in the lawsuit's remedial phase. This is certain to set a milestone for cryptocurrency regulation.

SEC Challenges Ripple's Defense

The SEC recently responded strongly to Ripple's supplemental brief, in which Ripple claimed its handling of XRP was not reckless, a point the SEC strongly refuted.

Although the blockchain startup tried to refute the "fair notice" argument, which had been previously dismissed by the court, the SEC maintains that there is ongoing legal ambiguity surrounding the status of XRP.

SEC: Ripple Has Not Reoffended, But Future Violations Possible

According to the SEC, despite no violations by Ripple since the litigation began, the possibility of future violations still exists.

The SEC criticized Ripple for attempting to minimize its responsibility while boasting about its cooperation with regulatory agencies since the initial XRP token issuance in 2013. Ripple's claims of restructuring future XRP sales to comply with legal guidance, deemed misleading by the SEC, indicate a misunderstanding of court orders and compliance requirements.

Read the XRP court documents for a detailed explanation of why XRP remains exposed to securities risks in the crypto market.

Questioning Ripple's Strategies, Unsuccessful

The SEC's response also raised questions about Ripple's claims regarding its sales strategies, especially those related to sales outside the U.S. and to accredited investors. These defenses were notably abandoned during the summary judgment phase.

Additionally, the SEC rejected Ripple's argument for contract adjustments based on on-demand liquidity sales, deeming these contracts still in violation of certain provisions.

SEC Still Advocates for Injunction

The SEC's filings advocate for an injunction against Ripple to prevent future legal violations, countering Ripple's optimistic view of its compliance and restructuring efforts. The regulatory agency remains skeptical about Ripple's ability to fully comply with established legal standards.

Ripple Responds to SEC Criticism: Reputation Self-Destruction

In contrast, Ripple's General Counsel Stuart Alderoty criticized the SEC's actions, believing they damaged the SEC's reputation among international regulators with more developed cryptocurrency frameworks. Alderoty still holds hope for a resolution favorable to Ripple.

Final Judgment Expected in September

As Ripple prepares to expand its operations in Japan through a partnership with HashKey DX, the crypto community awaits the final judgment expected around September. This case not only impacts Ripple and XRP but also sets a precedent for handling cryptocurrencies under U.S. securities laws.