In a recent development in the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs, renowned U.S. Attorney Bill Morgan has raised questions about the evidence the SEC has presented before Judge Analisa Torres to support its claim that XRP institutional investors suffered financial harm.
Morgan’s statement aligns with comments made by the XRP community, including influential YouTuber Moon Lambo, who have argued that no XRP holders were harmed by Ripple, despite the SEC’s assertions. This debate could have significant implications for the outcome of the case, as it revolves around the equitable remedy meant to compensate victims, rather than providing the SEC or the government with a windfall.
Bill Morgan’s statement underscores the uncertainty surrounding the SEC’s assertion that XRP institutional investors suffered financial harm as a result of Ripple’s actions. This aspect of the case is crucial, as it pertains to the equitable remedy that aims to compensate victims for their losses. Morgan’s skepticism aligns with Moon Lambo’s assertion that no XRP holders were harmed by Ripple, challenging the SEC’s argument.
Lambo’s comments suggest that the SEC might be facing another legal setback following remarks by Ripple’s Chief Legal Officer, Stuart Alderoty. Alderoty pointed to the Second Circuit’s decision in SEC v Govil, which held that the SEC cannot request a crippling disgorgement award without first demonstrating that “investors” suffered actual financial harm.
A potential twist: SEC facing claims of agency-induced harm
The debate surrounding investor harm has attracted the attention of legal experts, including Steven Neyaroff, the Inventor of Utility Token. Neyaroff has raised the possibility that the SEC could make a case that investors suffered pecuniary harm as a result of fraud, but not by Ripple, rather by the agency itself.
According to Neyaroff, if a court finds the SEC’s actions to be arbitrary and capricious, it should face penalties. He also emphasized that while immunity has its place, “qualified immunity” should be the standard if agency officials are found to have acted with malice.
The future of the SEC’s case against Ripple
Following the Govil decision and the ongoing debate over investor harm, there are speculations that the SEC could face another defeat in its legal battle against Ripple, particularly in the remedies stage. During this stage, the SEC must establish that XRP holders incurred financial losses as a result of their investments before Ripple can be held liable.
However, this could be a challenging task for the SEC, as attorney Jeremy Hogan has noted that investors who purchased Ripple below its current price have not suffered financial damage.
As the case continues to unfold, these arguments and questions regarding investor harm and the SEC’s evidence are likely to play a pivotal role in determining the outcome. The legal community and cryptocurrency enthusiasts are closely watching the developments, eager to see how the court addresses these critical issues.
