Unlikely Outcome: Ripple's Disgorgement of $770M Highly Unlikely, Says XRP Holder Attorney
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Unlikely Outcome: Ripple’s Disgorgement of $770M Highly Unlikely, Says XRP Holder Attorney

  • November 18, 2023

Unlikely Outcome: Ripple’s Disgorgement of $770M Highly Unlikely, Says XRP Holder Attorney

Unlikely Outcome: Ripple's Disgorgement of $770M Highly Unlikely, Says XRP Holder Attorney

As the legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) continues, a new perspective has emerged from an attorney representing XRP holders. The attorney suggests that the possibility of Ripple disgorging $770 million, as demanded by the SEC, is highly unlikely.

The SEC vs Ripple Labs: A Brief Overview

The SEC filed a lawsuit against Ripple Labs in December 2020, alleging that the company conducted an unregistered securities offering by selling XRP. The SEC argues that XRP should be classified as a security, not a cryptocurrency, and therefore falls under its regulatory purview.

Disgorgement: What It Means and Why It’s Unlikely

Disgorgement is a legal term referring to the act of giving up profits obtained through illegal or unethical activities. In this case, the SEC is seeking disgorgement of $770 million from Ripple Labs. However, the attorney representing XRP holders argues that this outcome is highly unlikely for several reasons:

  • Legal Precedent: The attorney points out that there is no legal precedent for such a large disgorgement in a case involving cryptocurrencies.
  • Regulatory Uncertainty: The classification of cryptocurrencies as securities is still a contentious issue, with no clear regulatory guidelines in place.
  • Impact on XRP Holders: A large disgorgement could potentially harm XRP holders, who are not implicated in the SEC’s allegations against Ripple Labs.

Case Studies: Previous SEC Disgorgements

To further illustrate the unlikelihood of a large disgorgement, the attorney cites previous SEC cases. For instance, in the SEC’s case against Telegram, the company was ordered to return $1.2 billion to investors and pay a civil penalty of $18.5 million. However, this amount is significantly less than the $770 million sought from Ripple Labs.

Statistics: The Impact on XRP

Since the SEC’s lawsuit, XRP’s market value has plummeted, causing significant losses for XRP holders. According to CoinMarketCap, XRP’s market cap dropped from $26 billion in December 2020 to $10 billion in January 2021, a decrease of over 60%.

Conclusion: Ripple’s Disgorgement Highly Unlikely

In conclusion, the attorney representing XRP holders believes that the SEC’s demand for a $770 million disgorgement from Ripple Labs is highly unlikely. This view is based on the lack of legal precedent, regulatory uncertainty, and potential harm to XRP holders. Furthermore, the impact of the SEC’s lawsuit on XRP’s market value underscores the significant consequences of this legal battle for Ripple Labs and XRP holders alike.