In the ongoing legal dispute between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), legal expert “MetaLawMan” on X platform has highlighted significant flaws in the SEC’s arguments, especially regarding alleged financial harm to XRP investors.

Analysis of SEC’s Arguments

MetaLawMan’s analysis suggests that the SEC’s arguments may not withstand scrutiny. He pointed out that the SEC’s Reply Brief fails to provide any substantial support for the claim of no victims or no disgorgement. 

This refers to a previous lawsuit, the SEC v. In the Govil case, the SEC faced a setback: the 2nd Circuit ruled that if a buyer experiences no financial loss, the SEC cannot seek disgorgement from the seller. During the remedies phase of the Ripple lawsuit, the SEC primarily cited SEC v. iFresh, a single district court decision, to bolster its claim that artificially inflated stock prices satisfy the “pecuniary harm” standard.standard.

Related article: Ripple Nears End of SEC Lawsuit

According to MetaLawMan, this expansive interpretation ignores the fact that cryptocurrency investments are speculative and that investors are fully aware of the risks involved.

Critique Of iFresh Decision

MetaLawMan views the iFresh decision as a misinterpretation of the 2nd Circuit’s ruling in Govil regarding disgorgement. He also noted that the iFresh decision was classified as “not for electronic or print publication,” which he finds unusual and weakens its authority. 

Related article: Ripple’s Stablecoin Plans Challenged by SEC Classification

While it remains uncertain if Judge Torres will adopt iFresh’s reasoning and find Ripple’s institutional investors suffered pecuniary harm, MetaLawMan believes the opposite conclusion is more likely.

With the submission of the SEC’s final reply brief, all eyes are now on the judge’s decision in the remedies phase of the Ripple lawsuit.