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Ripple's Stablecoin Project Already Attacked by SEC

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Wed, 8/05/2024 - 5:44
Ripple's Stablecoin Project Already Attacked by SEC
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The U.S. Securities and Exchange Commission already has Ripple's recently announced stablecoin in its crosshairs.  

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In its recent filing, the SEC described the stablecoin as an "unregistered crypto asset."

As reported by U.Today, Ripple announced its dollar-backed cryptocurrency in early April. The "enterprise-grade" stablecoin, which will be launched both on the XRP Ledger and Ethereum, is supposed to bridge traditional finance with crypto. 

According to Ripple CTO David Schwartz, the name of the stablecoin project is going to be unveiled in June. 

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The lawsuit is "closer than ever" to its end 

In its reply, the SEC claims that a permanent injunction should be granted because Ripple's business is based almost entirely on the sale of XRP to On-Demand Liquidy (ODL) customers. 

Last year, U.S. District Court Judge Analisa Torres ruled that Ripple violated security laws with direct sales of the XRP token to institutional investors.  

The SEC has accused Ripple of trying to relitigate summary judgment arguments. "Ripple can appeal, but its persistent refusal to accept the

Order’s holding for purposes of remedies shows an injunction is critical to avoid another violation," the agency said. 

In its reply, the SEC has also stressed that Ripple needs to pay a large penalty that "punishes and deters." As reported by U.Today, Ripple insisted on a penalty of merely $10 million, but this puny sum would not meaningfully punish its violations. Furthermore, the filing says that courts regularly impose punishments that equal the defendant's ill-gotten gains. 

While reacting to the SEC's reply, Stuart Alderoty, Ripple's top lawyer, remarked that Ripple was "closer than ever" to leaving the lawsuit behind them. 

"More of the same from the SEC -- failing to faithfully apply the law and trying to pull the wool over the Judge’s eyes. The good news is that we are closer than ever to putting this lawsuit behind us, though unfortunately, many are just starting the journey."

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