The legal battle between Ripple Labs and the Securities and Exchange Commission (SEC) is nearing its end game. After months of legal dispute, Ripple and the SEC have agreed to enter non-binding mediation.
The dispute started when the SEC alleged that Ripple committed an unregistered securities offer and sale, alleging that Ripple's sales of XRP, its digital asset, were securities transactions and violated their rules. Ripple has argued that XRP transactions are not securities transactions and therefore should not be regulated by the SEC.
Ripple Will Argue:
- XRP is not a security. Ripple has maintained that XRP is more akin to a digital currency than a security and that it should not, therefore, be classified and treated as a security by the Securities and Exchange Commission.
- Ripple Did Not Make an Unregistered Securities Offer. Ripple argues that it did not make an unregistered securities offer by selling XRP and that it should not be held liable for any alleged violations.
Ripple and the SEC have agreed to allow an outside mediator to assist in resolving their legal dispute. The mediator, who will be selected by the two parties, will examine the facts of the case and provide recommendations to the two parties on how to go forward. The mediator will have no power to impose a resolution on either party, but rather will act as an independent third-party facilitator.
The end game of the Ripple-SEC legal battle is an important step in resolving the dispute and ensuring that Ripple’s operations in the US remain compliant with US securities law.
The parties have yet to agree upon a date for the mediation, but have indicated that it should be held sometime in the near future.
The outcome of the Ripple-SEC legal battle could have major implications for the US cryptocurrency sector. If Ripple is found to have violated US securities laws, it could have a ripple effect across the industry, prompting further enforcement actions from the SEC and other regulators.
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