A recent court ruling has dealt a blow to the US Securities and Exchange Commission (SEC) in its ongoing battle with Ripple. The ruling stated that if a buyer does not suffer financial loss, the SEC cannot seek disgorgement from the defendant. This decision could have a significant impact on Ripple’s case, as reports suggest that the SEC is seeking up to $2 billion from the blockchain payments company.
The SEC has been relentless in its pursuit of crypto companies, with its latest target being the decentralized exchange Uniswap. However, the agency has been facing a series of losses in court, and this latest defeat could have implications for its lawsuit against Ripple.
Stuart Alderoty, the chief legal officer at Ripple, recently revealed that an appellate court had ruled against the SEC, upholding an earlier ruling against the agency. The case dates back to last November when the Court for the Second Circuit ruled that the SEC cannot request a disgorgement award without first proving that investors suffered actual financial harm.
The SEC appealed this ruling at the US Court of Appeals for the Second Circuit, but the appeal was denied. Alderoty pointed out that the SEC continues to lose in court, emphasizing that if a buyer does not suffer financial loss, the SEC cannot seek disgorgement from the seller.
Under the leadership of Gary Gensler, the SEC has been aggressively pursuing crypto companies. While some have chosen to settle for millions of dollars, others, like Coinbase and Ripple, have decided to fight the SEC in court. Gensler has faced numerous losses in these battles, including the recent case involving Bitcoin spot ETFs.
With each loss, the SEC’s authority and approach are being called into question. There is growing support for new regulations in the crypto industry and criticism of the SEC’s enforcement-focused approach.
Meanwhile, Ripple’s cryptocurrency XRP has experienced a decline in value, trading just below $0.5. It has lost over 8% in the past day and 17% in the past week, reflecting the broader market downturn over the weekend.