Magistrate Judge Sarah Netburn has established a timeline for the ongoing legal dispute between Ripple Labs and the United States Securities and Exchange Commission (SEC). Ripple has challenged the SEC’s request for significant civil penalties, arguing that the allegations lack sufficient evidence. The trial has attracted attention from the cryptocurrency community.
Judge Netburn, who recently became the District Judge in the Southern District of New York, is presiding over the Ripple vs. SEC case. Despite her new appointment, she remains impartial and has been positively received by the crypto community. She has previously acknowledged the utility of Ripple’s XRP and distinguished it from other cryptocurrencies like Bitcoin and Ethereum.
Ripple has disputed the SEC’s demand for substantial penalties and proposed a maximum fine of $10 million instead. The company argues that its On-Demand Liquidity transactions are different from traditional investments and should not face the same regulatory scrutiny. Ripple also highlights the absence of evidence supporting future violations or reckless behavior in its institutional XRP sales.
Bill Morgan, Ripple’s representative, emphasizes that customers use XRP for its utility in facilitating quick cross-border transactions rather than for investment purposes. However, settling the dispute is contingent on overcoming the regulatory hurdles set by the SEC, which continue to complicate negotiations. Legal expert Jeremy Hogan predicts that the lawsuit could conclude by the summer, with a potential settlement of $100 million.
Previously, the SEC had demanded a $2 billion fine from Ripple for alleged violations in XRP sales. However, Ripple argues that XRP should not be classified as a security and falls outside the SEC’s regulatory jurisdiction. Stuart Alderoty, Ripple’s chief legal officer, presents several key reasons why the penalty should not exceed $10 million, including the lack of evidence of financial harm.
The SEC’s reply brief is due by May 6 and is expected to shape market expectations further. A strong response from the SEC could increase the anticipation of punitive measures against Ripple, potentially impacting the value of XRP. As of now, XRP is trading at $0.503 with a 24-hour decline of 3%.