Ripple v SEC : Disgorgement Controversy Explained

Ripple v SEC : Disgorgement Controversy Explained

Prominent legal expert James “MetaLawMan” Murphy has offered new insights into the ongoing SEC v. Ripple lawsuit, particularly focusing on the SEC’s demand for disgorgement. Disgorgement, in the context of securities regulations, involves surrendering all profits gained through unlawful activities.

The SEC, in its opening remedies-related brief, has requested the court to impose a nearly $2 billion penalty against Ripple for violating federal securities laws. This penalty includes $876.3 million in disgorgement, an equal amount in civil penalties, and $198.15 million in prejudgment interest.

The “Crazy” Aspect Of Disgorgement

Murphy highlighted a significant issue with the SEC’s disgorgement demand during a recent interview on the Good Morning Crypto podcast. He pointed out that the U.S. Supreme Court has been explicit that all disgorged funds should be returned to the victims of the case. According to Murphy, the supposed victims in the Ripple case are institutional buyers of XRP.

Murphy explained that if the SEC wins, the recovered funds from disgorgement would go to these institutional buyers of XRP, who have already profited from their transactions with Ripple. He found it absurd that large institutions, which have already benefited financially, would receive additional money. “Can you imagine wiring tens of millions of dollars to big institutions that already made a profit from their interaction with Ripple?” Murphy remarked.

Related article: Ripple v. SEC: Legal Expert Challenges SEC’s Case

Ripple shares this sentiment. In its remedies-related reply brief, the company argued that any disgorgement directed to institutional buyers, who have already received their due benefits, would result in an undeserved windfall. Ripple urged the court to limit any civil penalty to no more than $10 million, arguing that no disgorgement is warranted.

Reactions From Pro-XRP Lawyers

Murphy’s analysis has sparked reactions from other pro-XRP lawyers, including Attorney Bill Morgan. Morgan criticized the SEC for planning to enrich XRP institutional customers through disgorgement. He labeled the SEC’s demand as one of the anomalies in the Ripple lawsuit, noting that it protects no one.

Related article: Ripple-SEC Lawsuit: Today’s Developments and Future Steps

Currently, the parties have filed the necessary remedies-related briefs and are in the process of filing omnibus motions regarding the sealing of confidential information associated with these briefs.

The SEC’s demand for nearly $2 billion, including a significant disgorgement component, has sparked controversy. Legal experts and Ripple alike argue that such a penalty would only benefit institutional buyers who have already profited, rather than serving justice or protecting genuine victims.

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Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.

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