Ripple expected to cut SEC’s $770 million claim

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Legal expert Jeremy Hogan details the strategies Ripple may employ to significantly reduce the SEC’s speculated $770 million fine.

On November 5, Hogan took to social media platform

Hogan emphasized that the “restitution” sought by the SEC, which seeks to recover profits from alleged wrongdoing, should be calculated using Ripple’s net profits rather than gross revenue. This key difference could allow business expenses to be deducted from Ripple, potentially significantly reducing the amount required.

Another point Hogan raised was the SEC’s jurisdiction, which is limited to the United States. He suggested that only those XRP sales with ties to the United States would be considered by the SEC, which could narrow the scope of the case and associated penalties.

SEC and Ripple

The legal dispute began in December 2020, when the SEC filed a lawsuit against Ripple Labs, accusing the company of conducting an unregistered securities offering by selling XRP.

The case saw various developments, including a noteworthy ruling by Judge Analisa Torres, which found that XRP was not a security when traded on the secondary market. The ruling, along with the reduced charges against Ripple executives, marks a turning point in the case.

Ripple’s legal team, led by lead attorney Stuart Alderoty, also drew attention to the recent Second Circuit ruling in SEC v. Govil. In this case, the court ruled that the SEC must prove that investors suffered actual financial losses before seeking substantial returns. This precedent supports Ripple’s position that the scope of its liability may depend on whether XRP investors suffered losses.

The latest development in the case is that Judge Torres approved an order requiring the SEC and Ripple to come up with a briefing schedule regarding institutional sales of XRP. This aspect of the lawsuit involves allegations that Ripple violated securities laws. Both parties have been directed to submit a joint notification schedule by November 9.


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