In March, the SEC offered new expert testimony in its opening brief, supporting arguments for a punitive penalty and an injunction. The injunction would prohibit Ripple from selling XRP to institutional investors. Significantly, the testimony related to Ripple’s post-complaint activity and analysis of its financial statements.
In its opening brief, the SEC argued Ripple continued to breach US securities laws after the SEC filed charges in December 2020 (post-complaint). In its Motion to Strike, Ripple argued the SEC did not disclose the identity of the expert witness or testimony during discovery.
If the court grants the Motion to Strike, the SEC cannot provide new testimony regarding Ripple’s post-complaint activity and financial statement analysis to pursue a punitive penalty.
The court ruling could influence market sentiment toward the SEC vs. Ripple case. Nevertheless, the SEC’s reply brief will impact buyer demand for XRP more.
The SEC will file a reply brief in response to Ripple’s opposition brief. Sound arguments against Ripple’s opposition brief could raise expectations of a punitive disgorgement and injunction. An injunction could materially impact Ripple’s expansion plans for the US market and demand for XRP. The SEC must file its reply brief by May 6.
After the May 6 filing, the court will decide on the penalty size and whether an injunction is appropriate. The court may deliver a ruling before September 2024. Investors expect the SEC to appeal the Programmatic Sales of XRP ruling at the end of the case.
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