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Ripple

ripple-labs

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 1 of 5. Plaintiff, the Securities and Exchange Commission (the “SEC”), brings this action against Defendant, Ripple Labs, Inc. (“Ripple”), alleging that Ripple engaged in the unlawful offer and sale of securities in violation of Section 5 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77e(a), (c). Am. Compl. ¶¶ 9, 430–35, ECF No. 46. On July 13, 2023, the Court granted in part and denied in part the parties’ cross-motions for summary judgment (the “Order”). Order, ECF No. 874; see SEC v. Ripple Labs, Inc., 682 F. Supp. 3d 308 (S.D.N.Y. 2023), motion to certify appeal denied, 697 F. Supp. 3d 126 (S.D.N.Y. 2023). Now before the Court is the SEC’s motion for remedies and the entry of final judgment. [1] SEC Mot., ECF No. 948; SEC Mem., ECF No. 949; Proposed Judgment, ECF No. 950. For the reasons stated below, the SEC’s motion is GRANTED IN PART and DENIED IN PART. BACKGROUND[2] This case involves Defendants’ offer and sale of XRP, the native digital token of the XRP Ledger, a cryptographically secured ledger or “blockchain.” Order at 2. On December 22, 2020, the SEC commenced this action. See Complaint, ECF No. 1. An amended complaint was filed on February 18, 2021. ECF No. 46. As relevant here, the SEC alleged that Ripple engaged in three categories of unregistered XRP offers and sales: (1) Institutional Sales[3] under written contracts for which it received $728 million; (2) Programmatic Sales on digital asset exchanges for which it received $757 million; and (3) Other Distributions under written contracts for which it recorded $609 million in “consideration other than cash.” Id. at 15–16; see id. at 4–5. The SEC also alleged that Bradley Garlinghouse and Christian A. Larsen, two of Ripple’s senior leaders, engaged in unregistered individual XRP sales from which they received at least $450 million and $150 million, respectively. Id. at 5, 16. Under Section 5 of the Securities Act, it is “unlawful for any person, directly or indirectly, . . . to offer to sell, offer to buy or purchase[,] or sell” a “security” unless a registration statement is in effect or has been filed with the SEC as to the offer and sale of such security to the public. 15 U.S.C. §§ 77e(a), (c), (e). To prove a violation of Section 5, the SEC must show: (1) that no registration statement was filed or in effect as to the transaction, and (2) that the defendant directly or indirectly offered to sell or sold the securities (3) through interstate commerce. See SEC v. Cavanagh, 445 F.3d 105, 111 n.13 (2d Cir. 2006). At summary judgment, the Court—applying the Supreme Court’s test set forth in SEC v. W.J. Howey Co., 328 U.S. 293 (1946)—concluded that Ripple’s Institutional Sales constituted offers or sales of investment contracts, but that Ripple’s Programmatic Sales and Other Distributions did not. Order at 30. The Court also held that Larsen’s and Garlinghouse’s individual sales were not offers or sales of investment contracts for “substantially the same reasons” stated in the Court’s analysis of Ripple’s Programmatic Sales. Id. at 27–28. The SEC subsequently moved to certify for interlocutory appeal the Court’s holdings on Programmatic Sales and Other Distributions. ECF No. 892. On October 3, 2023, the Court denied the SEC’s motion and set for trial the SEC’s claim that Larsen and Garlinghouse aided and abetted Ripple’s violations of Section 5 with regard to the Institutional Sales. ECF No. 917. By stipulation dated October 19, 2023, the SEC dismissed its pending claims against Larsen and Garlinghouse, obviating the need for a trial. ECF No. 921. Now before the Court is the SEC’s motion for remedies and entry of judgment on Ripple’s violations of Section 5 as to the Institutional Sales. The SEC seeks a final judgment against Ripple that (1) permanently enjoins it from future violations of Section 5 and from conducting an unregistered offering of XRP in Institutional Sales; (2) orders Ripple to pay $876,308,712 in disgorgement and $198,150,940 in prejudgment interest; and (3) orders Ripple to pay an $876,308,712 civil penalty. SEC Mem. at 1. Ripple contends that an injunction and disgorgement are unwarranted, and that any civil penalty should not exceed $10 million. See Ripple Opp., ECF No. 955. Continue Reading Here. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. [1] Ripple has also moved to seal certain documents filed in connection with the SEC’s motion. ECF No. 963; see ECF Nos. 964–68. The Court will address the sealing requests by separate order. [2] The Court presumes familiarity with the facts and procedural history of this matter as detailed in prior orders, see Order at 2–9, and, therefore, only summarizes those facts necessary for its decision here. [3] Capitalized terms not otherwise defined herein have the meanings set forth in the Order. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 1 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 1 of 5. HackerNoon’s Legal PDF Series here Plaintiff, the Securities and Exchange Commission (the “SEC”), brings this action against Defendant, Ripple Labs, Inc. (“Ripple”), alleging that Ripple engaged in the unlawful offer and sale of securities in violation of Section 5 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77e(a), (c). Am. Compl. ¶¶ 9, 430–35, ECF No. 46. On July 13, 2023, the Court granted in part and denied in part the parties’ cross-motions for summary judgment (the “Order”). Order, ECF No. 874; see SEC v. Ripple Labs, Inc., 682 F. Supp. 3d 308 (S.D.N.Y. 2023), motion to certify appeal denied, 697 F. Supp. 3d 126 (S.D.N.Y. 2023). Now before the Court is the SEC’s motion for remedies and the entry of final judgment. [1] SEC Mot., ECF No. 948; SEC Mem., ECF No. 949; Proposed Judgment, ECF No. 950. For the reasons stated below, the SEC’s motion is GRANTED IN PART and DENIED IN PART. BACKGROUND[2] This case involves Defendants’ offer and sale of XRP, the native digital token of the XRP Ledger, a cryptographically secured ledger or “blockchain.” Order at 2. On December 22, 2020, the SEC commenced this action. See Complaint, ECF No. 1. An amended complaint was filed on February 18, 2021. ECF No. 46. As relevant here, the SEC alleged that Ripple engaged in three categories of unregistered XRP offers and sales: (1) Institutional Sales[3] under written contracts for which it received $728 million; (2) Programmatic Sales on digital asset exchanges for which it received $757 million; and (3) Other Distributions under written contracts for which it recorded $609 million in “consideration other than cash.” Id. at 15–16; see id. at 4–5. The SEC also alleged that Bradley Garlinghouse and Christian A. Larsen, two of Ripple’s senior leaders, engaged in unregistered individual XRP sales from which they received at least $450 million and $150 million, respectively. Id. at 5, 16. Under Section 5 of the Securities Act, it is “unlawful for any person, directly or indirectly, . . . to offer to sell, offer to buy or purchase[,] or sell” a “security” unless a registration statement is in effect or has been filed with the SEC as to the offer and sale of such security to the public. 15 U.S.C. §§ 77e(a), (c), (e). To prove a violation of Section 5, the SEC must show: (1) that no registration statement was filed or in effect as to the transaction, and (2) that the defendant directly or indirectly offered to sell or sold the securities (3) through interstate commerce. See SEC v. Cavanagh, 445 F.3d 105, 111 n.13 (2d Cir. 2006). At summary judgment, the Court—applying the Supreme Court’s test set forth in SEC v. W.J. Howey Co., 328 U.S. 293 (1946)—concluded that Ripple’s Institutional Sales constituted offers or sales of investment contracts, but that Ripple’s Programmatic Sales and Other Distributions did not. Order at 30. The Court also held that Larsen’s and Garlinghouse’s individual sales were not offers or sales of investment contracts for “substantially the same reasons” stated in the Court’s analysis of Ripple’s Programmatic Sales. Id. at 27–28. The SEC subsequently moved to certify for interlocutory appeal the Court’s holdings on Programmatic Sales and Other Distributions. ECF No. 892. On October 3, 2023, the Court denied the SEC’s motion and set for trial the SEC’s claim that Larsen and Garlinghouse aided and abetted Ripple’s violations of Section 5 with regard to the Institutional Sales. ECF No. 917. By stipulation dated October 19, 2023, the SEC dismissed its pending claims against Larsen and Garlinghouse, obviating the need for a trial. ECF No. 921. Now before the Court is the SEC’s motion for remedies and entry of judgment on Ripple’s violations of Section 5 as to the Institutional Sales. The SEC seeks a final judgment against Ripple that (1) permanently enjoins it from future violations of Section 5 and from conducting an unregistered offering of XRP in Institutional Sales; (2) orders Ripple to pay $876,308,712 in disgorgement and $198,150,940 in prejudgment interest; and (3) orders Ripple to pay an $876,308,712 civil penalty. SEC Mem. at 1. Ripple contends that an injunction and disgorgement are unwarranted, and that any civil penalty should not exceed $10 million. See Ripple Opp., ECF No. 955. Continue Reading Here. Continue Reading Here . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com [1] Ripple has also moved to seal certain documents filed in connection with the SEC’s motion. ECF No. 963; see ECF Nos. 964–68. The Court will address the sealing requests by separate order. [2] The Court presumes familiarity with the facts and procedural history of this matter as detailed in prior orders, see Order at 2–9, and, therefore, only summarizes those facts necessary for its decision here. [3] Capitalized terms not otherwise defined herein have the meanings set forth in the Order.

SEC Seeks Over $1.7 Billion in Penalties from Ripple Labs for Alleged XRP Securities Law Violations

Is Layer One X's Delisting and Relisting Plan Too Little, Too Late?

የንብርብር አንድ X መሰረዝ እና እንደገና መዘርዘር እቅድ በጣም ትንሽ ነው፣ በጣም ዘግይቷል?

Layer One X-in Siyahıdan Çıxarılması və Yenidən Listinq Planı Çox Azdır, Çox Gecdir?

El pla de retirada i tornada a la llista de Layer One X és massa poc, massa tard?

¿El plan de exclusión y reincorporación de Layer One X es demasiado poco y demasiado tarde?

क्या लेयर वन एक्स की डीलिस्टिंग और रीलिस्टिंग योजना बहुत छोटी और बहुत देर से लाई गई है?

Èske Plan Delisting ak Relisting Layer One X a twò piti, twò ta?

Túl kevés, túl késő a Layer One X listáról való törlése és újbóli listázási terve?

Layer One X の上場廃止および再上場計画は、遅すぎ、不十分なのでしょうか?

¿Capa Uno Xpa Plan de Delistación y Relisting nisqa ancha pisillachu, ancha tardechu?

Är Layer One X:s plan för avnotering och åternotering för lite, för sent?

ናይ Layer One X መደብ ምውጋድን ዳግማይ ምዝርዛርን ኣዝዩ ውሑድ ድዩ፡ ኣዝዩ ደንጉዩ ድዩ?

Kế hoạch hủy niêm yết và niêm yết lại của Layer One X có quá ít và quá muộn không?

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This is the table of links with all parts. Case Number: 1:20-cv-10832-AT-SN Plaintiffs: Securities and Exchange Commission Defendant: Ripple Labs, Inc. Filing Date: August 07, 2024 Location: United States District Court Southern District of New York Table of Content Background Discussion I. Injunctive Relief
II. Disgorgement
III. Civil Penalties Conclusion About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This is the table of links with all parts. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This is the table of links with all parts. HackerNoon’s Legal PDF Series here Case Number: 1:20-cv-10832-AT-SN Case Number: Plaintiffs: Securities and Exchange Commission Plaintiffs: Defendant: Ripple Labs, Inc. Defendant: Filing Date: August 07, 2024 Filing Date: Location: United States District Court Southern District of New York Location: Table of Content Background Background Discussion I. Injunctive Relief II. Disgorgement III. Civil Penalties I. Injunctive Relief I. Injunctive Relief II. Disgorgement II. Disgorgement III. Civil Penalties III. Civil Penalties Conclusion Conclusion About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com

Court Orders Ripple to Stop Selling XRP, Imposes $125 Million Penalty

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 5 of 5. CONCLUSION The SEC’s motion for remedies and the entry of final judgment is GRANTED IN PART and DENIED IN PART. The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150. The Clerk of Court is directed to terminate the motions at ECF Nos. 943, 948, and 951. SO ORDERED. Dated: August 7, 2024 New York, New York About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 5 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 5 of 5. HackerNoon’s Legal PDF Series here CONCLUSION The SEC’s motion for remedies and the entry of final judgment is GRANTED IN PART and DENIED IN PART. The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150 . The Clerk of Court is directed to terminate the motions at ECF Nos. 943, 948, and 951. $125,035,150 SO ORDERED. Dated: August 7, 2024 New York, New York About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com

Ripple Hit with $125 Million Fine in SEC Lawsuit

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 4 of 5. III. Civil Penalties A. Legal Standard The SEC is also authorized to seek the imposition of civil monetary penalties, which serve “the dual goals of punishment of the individual violator and deterrence of future violations.” Off. Comm. of Unsecured Creditors of WorldCom, Inc. v. SEC, 467 F.3d 73, 81 (2d Cir. 2006) (quotation marks and citation omitted). “Courts can impose penalties in civil injunctive actions not to exceed the greater of: (i) the gross pecuniary gain to a defendant as a result of the violation, or (ii) a specified amount per violation, depending on whether the violation falls in the first, second[,] or third penalty tier.” SEC v. Bajic, No. 20 Civ. 07, 2023 WL 6289953, at *4 (S.D.N.Y. Sept. 27, 2023) (citing 15 U.S.C. § 77t(d)(2); 15 U.S.C. § 78u(d)(3)(B)). A court may impose a first-tier penalty for any violation of the Exchange or Securities Acts; a second-tier penalty if the violation “involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement”; and a third-tier penalty if, in addition to meeting the second-tier requirements, the “violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.” Id. (citations omitted). Because “[t]he term ‘violation’ is not defined by the statutory scheme,” courts have discretion to determine the unit of violation for the purposes of imposing civil penalties under the tier method. SEC v. Fowler, 6 F.4th 255, 264 (2d Cir. 2021); see id. at 265. Although gross pecuniary gain or “the tier determines the maximum penalty, . . . the actual amount of the penalty [is] left up to the discretion of the district court.” SEC v. Kern, 425 F.3d 143, 153 (2d Cir. 2005). In determining the appropriate penalty, courts may consider factors including: (1) the egregiousness of the defendant’s conduct; (2) the degree of the defendant’s scienter; (3) whether the defendant’s conduct created substantial losses or the risk of substantial losses to other persons; (4) whether the defendant’s conduct was isolated or recurrent; and (5) whether the penalty should be reduced due to the defendant’s demonstrated current and future financial condition. SEC v. Rajaratnam, 918 F.3d 36, 44 (2d Cir. 2019) (citation omitted); see also id. at 45 (noting that the list is not exhaustive); cf. Fowler, 6 F.4th at 266 (noting that the Circuit has not held that “the civil penalty for a securities fraud offense needs to be proportional to the disgorgement amount”). The Court may also consider “the extent to which other aspects of the relief and/or judgment issued in this matter will have the desired punitive effect.” SEC v. Universal Exp., Inc., 646 F. Supp. 2d 552, 568 (S.D.N.Y. 2009), aff’d, 438 F. App’x 23 (2d Cir. 2011). B. Application The SEC asks the Court to impose a penalty of $876,308,712, equal to the net profits it calculates for the Institutional Sales. SEC Mem. at 23. Ripple argues that a penalty of no more than $10 million, or “about [redacted] of Ripple’s actual gross revenues . . . from pre-Complaint Institutional Sales,” is appropriate. Ripple Opp. at 30 (citation omitted). The Court finds that a first-tier penalty is appropriate in this case, which involves no allegations of “fraud, deceit, [or] manipulation,” and no conclusively established “deliberate or reckless disregard of a regulatory requirement.” 15 U.S.C. § 77t(d)(2)(B); see supra Part I.B. Although Ripple’s gross pecuniary gain from the Institutional Sales sets a higher statutory ceiling, the Court finds that the tier-analysis method more closely tailors the penalty to the scope of Ripple’s actual wrongdoing than the parties’ (virtually) all-or-nothing requests. As to the amount of the penalty, the Court has discussed the second and fourth Rajaratnam factors, which overlap with the factors relevant to injunctive relief, above. See supra Part I.B. On the first factor, the egregiousness of Ripple’s conduct, there is no question that the recurrent, highly lucrative violation of Section 5 is a serious offense. However, this case does not involve allegations of fraud, misappropriation, or other more culpable conduct. Relatedly, as to the third factor, the SEC has not established that Ripple’s failure to register the Institutional Sales caused substantial losses (or the risk thereof) to investors. See supra Part II.B. And, on the fifth factor, Ripple does not contest that its current financial condition does not merit a reduced penalty. See Ripple Opp. at 28–29. Beyond the Rajaratnam factors, the Court considers that Ripple will not be ordered to pay disgorgement, which dictates in favor of a larger penalty to accomplish “the desired punitive effect.” Universal Exp., Inc., 646 F. Supp. 2d at 568. The Court finds, therefore, that a perviolation penalty at the first-tier maximum is appropriate. The final step is to define and count the “violations” involved in the Institutional Sales. Because Section 5’s registration requirement is “transaction-specific,” it follows that each unregistered transaction constitutes a separate violation of the statute. Cavanagh, 155 F.3d at 133; see also SEC v. Colonial Inv. Mgmt. LLC, 381 F. App’x 27, 29 (2d Cir. 2010) (summary order) (affirming per-transaction penalties calculation). The SEC suggests that each of Ripple’s “1,700 relevant contracts” constitutes a separate violation. SEC Mem. at 23–24 n.8. Ripple responds that the “1,700 relevant contracts” figure includes “hundreds of contracts related to Programmatic Sales and Other Distributions,” which should be excluded. Ripple Opp. at 19 n.20. But, Ripple does not offer its own tabulation of the relevant contracts, and the SEC does not respond to Ripple’s contention in its reply brief. Based on the Court’s independent analysis of Ripple’s expert report summarizing the relevant contracts, see Schwarz Rep., ECF No. 582-7, the Court finds that 1,278 transactions violated Section 5, resulting in a civil penalty of $125,035,150. [10] Accordingly, the SEC’s request for a civil monetary penalty is GRANTED in part, and the Court will impose a penalty of $125,035,150. Continue Reading Here. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. [10]  The Court arrived at this figure by first tabulating the 1,278 “Sales Contracts” listed in Exhibit C of the expert’s report, which excluded “Programmatic Contracts,” “Service Contracts,” and “Other Contracts.” Schwarz Rep. at 80–124; see id. ¶¶ 18–55. The Court then determined the applicable penalty for each contract based on its date. See 17 C.F.R. § 201.1001, Tbl. I; Adjustments to Civ. Monetary Penalty Amounts, Release No. 6521, 2024 WL 111023 (Jan. 5, 2024) (“Release No. 6521”). For contracts entered into on or after November 2, 2015, the penalty is currently $115,231 per contract. Release No. 6521. For contracts entered into between March 6, 2013 and November 2, 2015, the penalty is $80,000 per contract. 17 C.F.R. § 201.1001, Tbl. I. And, for contracts entered into between March 4, 2009 and March 5, 2013, the penalty is $75,000 per contract. Id. For the four undated contracts, the Court applied the current inflation-adjusted penalty amount. Finally, the Court totaled the per-contract penalties to arrive at a civil penalty of $125,035,150. This sum is concededly an estimate of the maximum first-tier penalty; it is possible that the contracts listed in Exhibit C are either an incomplete or overinclusive list of Ripple’s Institutional Sales during the relevant period. Because neither party provided a more specific calculation, however, the Court believes that its estimate is an adequate approximation. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 4 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 4 of 5. HackerNoon’s Legal PDF Series here III. Civil Penalties A. Legal Standard A. Legal Standard The SEC is also authorized to seek the imposition of civil monetary penalties, which serve “the dual goals of punishment of the individual violator and deterrence of future violations.” Off. Comm. of Unsecured Creditors of WorldCom, Inc. v. SEC, 467 F.3d 73, 81 (2d Cir. 2006) (quotation marks and citation omitted). “Courts can impose penalties in civil injunctive actions not to exceed the greater of: (i) the gross pecuniary gain to a defendant as a result of the violation, or (ii) a specified amount per violation, depending on whether the violation falls in the first, second[,] or third penalty tier.” SEC v. Bajic, No. 20 Civ. 07, 2023 WL 6289953, at *4 (S.D.N.Y. Sept. 27, 2023) (citing 15 U.S.C. § 77t(d)(2); 15 U.S.C. § 78u(d)(3)(B)). A court may impose a first-tier penalty for any violation of the Exchange or Securities Acts; a second-tier penalty if the violation “involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement”; and a third-tier penalty if, in addition to meeting the second-tier requirements, the “violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.” Id. (citations omitted). Because “[t]he term ‘violation’ is not defined by the statutory scheme,” courts have discretion to determine the unit of violation for the purposes of imposing civil penalties under the tier method. SEC v. Fowler, 6 F.4th 255, 264 (2d Cir. 2021); see id. at 265. Although gross pecuniary gain or “the tier determines the maximum penalty, . . . the actual amount of the penalty [is] left up to the discretion of the district court.” SEC v. Kern, 425 F.3d 143, 153 (2d Cir. 2005). In determining the appropriate penalty, courts may consider factors including: (1) the egregiousness of the defendant’s conduct; (2) the degree of the defendant’s scienter; (3) whether the defendant’s conduct created substantial losses or the risk of substantial losses to other persons; (4) whether the defendant’s conduct was isolated or recurrent; and (5) whether the penalty should be reduced due to the defendant’s demonstrated current and future financial condition. SEC v. Rajaratnam, 918 F.3d 36, 44 (2d Cir. 2019) (citation omitted); see also id. at 45 (noting that the list is not exhaustive); cf. Fowler, 6 F.4th at 266 (noting that the Circuit has not held that “the civil penalty for a securities fraud offense needs to be proportional to the disgorgement amount”). The Court may also consider “the extent to which other aspects of the relief and/or judgment issued in this matter will have the desired punitive effect.” SEC v. Universal Exp., Inc., 646 F. Supp. 2d 552, 568 (S.D.N.Y. 2009), aff’d, 438 F. App’x 23 (2d Cir. 2011). B. Application B. Application The SEC asks the Court to impose a penalty of $876,308,712, equal to the net profits it calculates for the Institutional Sales. SEC Mem. at 23. Ripple argues that a penalty of no more than $10 million, or “about [redacted] of Ripple’s actual gross revenues . . . from pre-Complaint Institutional Sales,” is appropriate. Ripple Opp. at 30 (citation omitted). The Court finds that a first-tier penalty is appropriate in this case, which involves no allegations of “fraud, deceit, [or] manipulation,” and no conclusively established “deliberate or reckless disregard of a regulatory requirement.” 15 U.S.C. § 77t(d)(2)(B); see supra Part I.B. Although Ripple’s gross pecuniary gain from the Institutional Sales sets a higher statutory ceiling, the Court finds that the tier-analysis method more closely tailors the penalty to the scope of Ripple’s actual wrongdoing than the parties’ (virtually) all-or-nothing requests. As to the amount of the penalty, the Court has discussed the second and fourth Rajaratnam factors, which overlap with the factors relevant to injunctive relief, above. See supra Part I.B. On the first factor, the egregiousness of Ripple’s conduct, there is no question that the recurrent, highly lucrative violation of Section 5 is a serious offense. However, this case does not involve allegations of fraud, misappropriation, or other more culpable conduct. Relatedly, as to the third factor, the SEC has not established that Ripple’s failure to register the Institutional Sales caused substantial losses (or the risk thereof) to investors. See supra Part II.B. And, on the fifth factor, Ripple does not contest that its current financial condition does not merit a reduced penalty. See Ripple Opp. at 28–29. Beyond the Rajaratnam factors, the Court considers that Ripple will not be ordered to pay disgorgement, which dictates in favor of a larger penalty to accomplish “the desired punitive effect.” Universal Exp., Inc., 646 F. Supp. 2d at 568. The Court finds, therefore, that a perviolation penalty at the first-tier maximum is appropriate. The final step is to define and count the “violations” involved in the Institutional Sales. Because Section 5’s registration requirement is “transaction-specific,” it follows that each unregistered transaction constitutes a separate violation of the statute. Cavanagh, 155 F.3d at 133; see also SEC v. Colonial Inv. Mgmt. LLC, 381 F. App’x 27, 29 (2d Cir. 2010) (summary order) (affirming per-transaction penalties calculation). The SEC suggests that each of Ripple’s “1,700 relevant contracts” constitutes a separate violation. SEC Mem. at 23–24 n.8. Ripple responds that the “1,700 relevant contracts” figure includes “hundreds of contracts related to Programmatic Sales and Other Distributions,” which should be excluded. Ripple Opp. at 19 n.20. But, Ripple does not offer its own tabulation of the relevant contracts, and the SEC does not respond to Ripple’s contention in its reply brief. Based on the Court’s independent analysis of Ripple’s expert report summarizing the relevant contracts, see Schwarz Rep., ECF No. 582-7, the Court finds that 1,278 transactions violated Section 5, resulting in a civil penalty of $125,035,150. [10] Accordingly, the SEC’s request for a civil monetary penalty is GRANTED in part, and the Court will impose a penalty of $125,035,150. Continue Reading Here. Continue Reading Here . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com [10]  The Court arrived at this figure by first tabulating the 1,278 “Sales Contracts” listed in Exhibit C of the expert’s report, which excluded “Programmatic Contracts,” “Service Contracts,” and “Other Contracts.” Schwarz Rep. at 80–124; see id. ¶¶ 18–55. The Court then determined the applicable penalty for each contract based on its date. See 17 C.F.R. § 201.1001, Tbl. I; Adjustments to Civ. Monetary Penalty Amounts, Release No. 6521, 2024 WL 111023 (Jan. 5, 2024) (“Release No. 6521”). For contracts entered into on or after November 2, 2015, the penalty is currently $115,231 per contract. Release No. 6521. For contracts entered into between March 6, 2013 and November 2, 2015, the penalty is $80,000 per contract. 17 C.F.R. § 201.1001, Tbl. I. And, for contracts entered into between March 4, 2009 and March 5, 2013, the penalty is $75,000 per contract. Id. For the four undated contracts, the Court applied the current inflation-adjusted penalty amount. Finally, the Court totaled the per-contract penalties to arrive at a civil penalty of $125,035,150. This sum is concededly an estimate of the maximum first-tier penalty; it is possible that the contracts listed in Exhibit C are either an incomplete or overinclusive list of Ripple’s Institutional Sales during the relevant period. Because neither party provided a more specific calculation, however, the Court believes that its estimate is an adequate approximation.

SEC Hands Ripple a $125M Reality Check

SEC হ্যান্ডস রিপল $125M রিয়েলিটি চেক পায়

SEC übergibt Ripple einen Realitätscheck über 125 Millionen Dollar

La SEC le da a Ripple una dosis de realidad de 125 millones de dólares

La SEC remet à Ripple un chèque de 125 millions de dollars

एसईसी ने रिपल को 125 मिलियन डॉलर का वास्तविकता परीक्षण दिया

SECがリップル社に1億2500万ドルの現実を突きつける

SEC Hands Ripple이 1억 2,500만 달러의 현실 확인을 받다

SEC Hands Ripple recebe uma verificação da realidade de US$ 125 milhões

SEC вручает Ripple проверку на реальность на сумму 125 млн долларов

SEC, Ripple'a 125 Milyon Dolarlık Gerçeklik Kontrolü Sağladı

SEC trao Ripple khoản tiền kiểm tra thực tế trị giá 125 triệu đô la

SEC 向 Ripple 发出 1.25 亿美元现实检查

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 3 of 5. II. Disgorgement A. Legal Standard In addition to injunctive relief, a district court may also order disgorgement, which “serves to remedy securities law violations by depriving violators of the fruits of their illegal conduct.” SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 2014). Disgorgement is an equitable remedy, permissible only where it “does not exceed a wrongdoer’s net profits and is awarded for victims.” Liu v. SEC, 591 U.S. 71, 75 (2020). [6] Following Liu, the Second Circuit clarified the meaning of “victims” in SEC v. Govil, 86 F.4th 89 (2d Cir. 2023). There, the defendant caused his company “to engage in three fraudulent securities offerings,” representing to investors that the company “would use the proceeds from the transactions to satisfy outstanding debts and for general corporate purposes.” Id. at 93. “Instead, he diverted over $7.3 million of the offering proceeds to his own private accounts.” Id. The district court determined that disgorgement was warranted, reasoning that the defrauded investors were victims of the defendant’s conduct because they were lied to, even if they “may not have been financially harmed” as a result of the lie. Id. at 97. The Second Circuit reversed, holding that “a ‘victim’ for purposes of § 78u(d)(5) is one who suffers pecuniary harm from the securities fraud.” Id. at 102. The Circuit explained that an equitable remedy is meant to “restore[] the status quo”—in the context of disgorgement, by “returning the funds to victims.” Id. at 103 (quoting Liu, 591 U.S. at 80, 88) (cleaned up). Allowing “defrauded investors who suffered no pecuniary harm . . . to receive the proceeds of disgorgement,” the Circuit reasoned, would “confer[] a windfall on those who received the benefit of the bargain.” Id. at 103. Therefore, for purposes of ordering disgorgement, it is not enough that investors are lied to and “thus denied the right to make an informed decision when considering whether to make [an] investment.” Id. at 105. “[O]ffending that right” does not result in pecuniary harm.” Id. (citing Ciminelli v. United States, 598 U.S. 306, 315 (2023)) B. Application The parties dispute whether the Circuit’s decision in Govil bars disgorgement of Ripple’s profits from Institutional Sales. The Court finds that it does. The SEC contends that ordering disgorgement would not run afoul of Govil because Ripple’s violation of Section 5, via “entirely tainted transactions, caused pecuniary harm to investors.” SEC Mem. at 17. Specifically, the SEC argues that Ripple sold XRP to certain Institutional Buyers at “deep undisclosed discounts” as high as [redacted]. Id. at 18. Because Ripple failed to publicly register these discounted Institutional Sales, the SEC argues, “non-favored investors” were deprived of “the information they needed to determine whether Ripple was treating them worse and whether they could purchase [] XRP at a better price.” Id. The SEC estimates that if Ripple had disclosed its “significant discounts to other investors,” non-favored investors could have saved “potentially more than [redacted].” Id. at 19–20. The SEC further contends that the discounted sales caused pecuniary harm by “put[ting] downward pressure on the market price of XRP,” as investors who bought discounted XRP could sell for below-market prices and still profit. Id. at 20. Govil forecloses this argument. The SEC contends that Ripple “appears to have not uniformly disclosed the disparate prices and discounts offered” to Institutional Buyers. Id. at 18. The Circuit held, however, that “the right to make an informed decision when considering whether to make [an] investment” is not a property interest that can be vindicated through disgorgement. Govil, 86 F.4th at 105. As Ripple argues, many of the Govil investors would have likely been dissuaded from investing—or, at least, valued the shares at a lower price—had they known that the company’s founder intended to pocket the funds for his own use. See Ripple Opp. at 20. Yet the Circuit found that the pecuniary-harm requirement was not satisfied, as the district court acknowledged that “the investors received the return on the investment contemplated at the outset.” Govil, 86 F.4th at 105. Here, the SEC offers only speculative evidence that the Institutional Buyers did not “receive[] the return on the investment contemplated.” Id; see also id. at 104 n.16 (noting that “whether the investors actually suffered pecuniary harm would depend on the type of securities held, the terms of those securities, and when those securities were sold,” a level of detail missing from the record in Govil). The SEC’s [redacted] estimate of lost potential savings comes from an analysis conducted by SEC accountant Andrea Fox, who calculated “how much less Institutional Buyers in the aggregate would have paid for XRP if the best price offered to Institutional Buyers had been obtained by every Institutional Buyer.”[7] Fox Decl. ¶ 34, ECF No. 946. But, the SEC does not (and cannot) establish that Ripple would have, in fact, offered any additional discounts to investors had it complied with Section 5’s registration requirements. It is possible that some investors “could have demanded and potentially paid lower prices.” SEC Mem. at 18. Yet, it is at least equally possible that Ripple would have opted to offer fewer and smaller discounts overall. Cf. id. at 17 (explaining that “unregistered shares . . . are [generally] worth less” than their registered counterparts). The fact that some investors “may have been able to negotiate better deals if discounts [offered to others] were disclosed as required,” SEC Mem. at 19, does not establish that they suffered pecuniary harm by paying the sticker price. Cf. Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 342 (2005) (noting that in fraud-on-the-market cases, “an inflated purchase price will not itself constitute or proximately cause the relevant economic loss”).[8] Relying on SEC v. Ahmed, 72 F.4th 379 (2d Cir. 2023), the SEC also argues that disgorgement is appropriate because Ripple’s failure to disclose the discounts “tainted” each of the Institutional Sales. SEC Reply at 9, ECF No. 961. In Ahmed, the investment-manager defendant “stole over $65 million” from his employer and ten portfolio companies, including by negotiating transactions in which he had an undisclosed conflict of interest. 72 F.4th at 390. The Second Circuit found that the conflicted transactions were “entirely tainted,” holding that the defendant was obligated to disgorge the full amount he received. Id. at 397. But the Circuit’s inquiry into the permissible amount of disgorgement sheds little light on the threshold question here: whether the SEC has shown pecuniary harm at all such that disgorgement is warranted. In Ahmed, which involved the defendant’s knowing misappropriation of millions of dollars from his employer, there was no question that the employer had suffered an economic loss. See id. at 390–91. Here, pecuniary harm is far less apparent. Because binding Circuit precedent precludes disgorgement based on the facts of this case, the SEC’s request for disgorgement and prejudgment interest[9] is DENIED. Continue Reading Here. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. [6] Six months after Liu, “Congress enacted § 78u(d)(7), which “gives the SEC the power to ‘seek’ and federal courts the power to ‘order’ the remedy of ‘disgorgement.’” SEC v. Govil, 86 F.4th 89, 99–100 (2d Cir. 2023) (discussing 15 U.S.C. § 78u(d)(7)). The Second Circuit has interpreted § 78u(d)(7) to limit disgorgement to the bounds established by the Supreme Court’s decision in Liu. Id. at 102 (citing SEC v. Ahmed, 72 F.4th 379, 396 (2d Cir. 2023)). But see SEC v. Hallam, 42 F.4th 316, 338 (5th Cir. 2022) (holding that “Section 78u(d) authorizes disgorgement in a legal—not equitable—sense.”). [7] Ripple separately moves to strike Fox’s declaration and supporting exhibits, arguing that they were filed late. ECF No. 951; see ECF Nos. 959, 960. In light of the Court’s finding that no disgorgement is permitted, the motion is DENIED as moot. [8] The SEC’s sole authority to the contrary, SEC v. iFresh, Inc., No. 22 Civ. 3200, 2024 WL 416709 (E.D.N.Y. Feb. 5, 2024), is an unpublished district court opinion that found (without analysis) the fact that stock prices were artificially inflated sufficient to establish pecuniary harm. Id. at *3; see SEC Reply at 9, ECF No. 961. That case— involving a consent order—required the district court to accept the SEC’s allegations of stock price inflation as true. iFresh, Inc., 2024 WL 416709 at *3. [9] “[T]he amount on which a violator must pay prejudgment interest usually tracks the amount that the party is ordered to disgorge.” Contorinis, 743 F.3d at 308. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 3 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 3 of 5. HackerNoon’s Legal PDF Series here II. Disgorgement A. Legal Standard A. Legal Standard In addition to injunctive relief, a district court may also order disgorgement, which “serves to remedy securities law violations by depriving violators of the fruits of their illegal conduct.” SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 2014). Disgorgement is an equitable remedy, permissible only where it “does not exceed a wrongdoer’s net profits and is awarded for victims.” Liu v. SEC, 591 U.S. 71, 75 (2020). [6] Following Liu, the Second Circuit clarified the meaning of “victims” in SEC v. Govil, 86 F.4th 89 (2d Cir. 2023). There, the defendant caused his company “to engage in three fraudulent securities offerings,” representing to investors that the company “would use the proceeds from the transactions to satisfy outstanding debts and for general corporate purposes.” Id. at 93. “Instead, he diverted over $7.3 million of the offering proceeds to his own private accounts.” Id. The district court determined that disgorgement was warranted, reasoning that the defrauded investors were victims of the defendant’s conduct because they were lied to, even if they “may not have been financially harmed” as a result of the lie. Id. at 97. The Second Circuit reversed, holding that “a ‘victim’ for purposes of § 78u(d)(5) is one who suffers pecuniary harm from the securities fraud.” Id. at 102. The Circuit explained that an equitable remedy is meant to “restore[] the status quo”—in the context of disgorgement, by “returning the funds to victims.” Id. at 103 (quoting Liu, 591 U.S. at 80, 88) (cleaned up). Allowing “defrauded investors who suffered no pecuniary harm . . . to receive the proceeds of disgorgement,” the Circuit reasoned, would “confer[] a windfall on those who received the benefit of the bargain.” Id. at 103. Therefore, for purposes of ordering disgorgement, it is not enough that investors are lied to and “thus denied the right to make an informed decision when considering whether to make [an] investment.” Id. at 105. “[O]ffending that right” does not result in pecuniary harm.” Id. (citing Ciminelli v. United States, 598 U.S. 306, 315 (2023)) B. Application B. Application The parties dispute whether the Circuit’s decision in Govil bars disgorgement of Ripple’s profits from Institutional Sales. The Court finds that it does. The SEC contends that ordering disgorgement would not run afoul of Govil because Ripple’s violation of Section 5, via “entirely tainted transactions, caused pecuniary harm to investors.” SEC Mem. at 17. Specifically, the SEC argues that Ripple sold XRP to certain Institutional Buyers at “deep undisclosed discounts” as high as [redacted]. Id. at 18. Because Ripple failed to publicly register these discounted Institutional Sales, the SEC argues, “non-favored investors” were deprived of “the information they needed to determine whether Ripple was treating them worse and whether they could purchase [] XRP at a better price.” Id. The SEC estimates that if Ripple had disclosed its “significant discounts to other investors,” non-favored investors could have saved “potentially more than [redacted].” Id. at 19–20. The SEC further contends that the discounted sales caused pecuniary harm by “put[ting] downward pressure on the market price of XRP,” as investors who bought discounted XRP could sell for below-market prices and still profit. Id. at 20. Govil forecloses this argument. The SEC contends that Ripple “appears to have not uniformly disclosed the disparate prices and discounts offered” to Institutional Buyers. Id. at 18. The Circuit held, however, that “the right to make an informed decision when considering whether to make [an] investment” is not a property interest that can be vindicated through disgorgement. Govil, 86 F.4th at 105. As Ripple argues, many of the Govil investors would have likely been dissuaded from investing—or, at least, valued the shares at a lower price—had they known that the company’s founder intended to pocket the funds for his own use. See Ripple Opp. at 20. Yet the Circuit found that the pecuniary-harm requirement was not satisfied, as the district court acknowledged that “the investors received the return on the investment contemplated at the outset.” Govil, 86 F.4th at 105. Here, the SEC offers only speculative evidence that the Institutional Buyers did not “receive[] the return on the investment contemplated.” Id; see also id. at 104 n.16 (noting that “whether the investors actually suffered pecuniary harm would depend on the type of securities held, the terms of those securities, and when those securities were sold,” a level of detail missing from the record in Govil). The SEC’s [redacted] estimate of lost potential savings comes from an analysis conducted by SEC accountant Andrea Fox, who calculated “how much less Institutional Buyers in the aggregate would have paid for XRP if the best price offered to Institutional Buyers had been obtained by every Institutional Buyer.”[7] Fox Decl. ¶ 34, ECF No. 946. But, the SEC does not (and cannot) establish that Ripple would have, in fact, offered any additional discounts to investors had it complied with Section 5’s registration requirements. It is possible that some investors “could have demanded and potentially paid lower prices.” SEC Mem. at 18. Yet, it is at least equally possible that Ripple would have opted to offer fewer and smaller discounts overall. Cf. id. at 17 (explaining that “unregistered shares . . . are [generally] worth less” than their registered counterparts). The fact that some investors “may have been able to negotiate better deals if discounts [offered to others] were disclosed as required,” SEC Mem. at 19, does not establish that they suffered pecuniary harm by paying the sticker price. Cf. Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 342 (2005) (noting that in fraud-on-the-market cases, “an inflated purchase price will not itself constitute or proximately cause the relevant economic loss”).[8] Relying on SEC v. Ahmed, 72 F.4th 379 (2d Cir. 2023), the SEC also argues that disgorgement is appropriate because Ripple’s failure to disclose the discounts “tainted” each of the Institutional Sales. SEC Reply at 9, ECF No. 961. In Ahmed, the investment-manager defendant “stole over $65 million” from his employer and ten portfolio companies, including by negotiating transactions in which he had an undisclosed conflict of interest. 72 F.4th at 390. The Second Circuit found that the conflicted transactions were “entirely tainted,” holding that the defendant was obligated to disgorge the full amount he received. Id. at 397. But the Circuit’s inquiry into the permissible amount of disgorgement sheds little light on the threshold question here: whether the SEC has shown pecuniary harm at all such that disgorgement is warranted. In Ahmed, which involved the defendant’s knowing misappropriation of millions of dollars from his employer, there was no question that the employer had suffered an economic loss. See id. at 390–91. Here, pecuniary harm is far less apparent. Because binding Circuit precedent precludes disgorgement based on the facts of this case, the SEC’s request for disgorgement and prejudgment interest[9] is DENIED. Continue Reading Here. Continue Reading Here . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com [6] Six months after Liu, “Congress enacted § 78u(d)(7), which “gives the SEC the power to ‘seek’ and federal courts the power to ‘order’ the remedy of ‘disgorgement.’” SEC v. Govil, 86 F.4th 89, 99–100 (2d Cir. 2023) (discussing 15 U.S.C. § 78u(d)(7)). The Second Circuit has interpreted § 78u(d)(7) to limit disgorgement to the bounds established by the Supreme Court’s decision in Liu. Id. at 102 (citing SEC v. Ahmed, 72 F.4th 379, 396 (2d Cir. 2023)). But see SEC v. Hallam, 42 F.4th 316, 338 (5th Cir. 2022) (holding that “Section 78u(d) authorizes disgorgement in a legal—not equitable—sense.”). [7] Ripple separately moves to strike Fox’s declaration and supporting exhibits, arguing that they were filed late. ECF No. 951; see ECF Nos. 959, 960. In light of the Court’s finding that no disgorgement is permitted, the motion is DENIED as moot. [8] The SEC’s sole authority to the contrary, SEC v. iFresh, Inc., No. 22 Civ. 3200, 2024 WL 416709 (E.D.N.Y. Feb. 5, 2024), is an unpublished district court opinion that found (without analysis) the fact that stock prices were artificially inflated sufficient to establish pecuniary harm. Id. at *3; see SEC Reply at 9, ECF No. 961. That case— involving a consent order—required the district court to accept the SEC’s allegations of stock price inflation as true. iFresh, Inc., 2024 WL 416709 at *3. [9] “[T]he amount on which a violator must pay prejudgment interest usually tracks the amount that the party is ordered to disgorge.” Contorinis, 743 F.3d at 308.

Court Denies SEC's Request for $1 Billion in Disgorgement from Ripple

Court Grants SEC’s Injunction Against Ripple

Fraud, scandal, regulatory squabbling, and bankruptcy marked crypto's 14th year. 2023 may have been one brutal year in the industry, but ironically, it may still have been one of the sector's best years. cryptocurrency As macro conditions rally and Bitcoin bounces back, financial cops and entrepreneurs anticipate similar to the 2013 BTC-led bull market. This article looks back at the highlights of 2023 in anticipation of a possibly glamorous 2024. A Whirlwind Year For Crypto 2023 was ruthless, to say the least, with a cast of malefactors associated with the 2021 crypto boom meeting justice by and large. From Sam Bankman-Fried (SBF) to Changpeng Zhao (CZ) and other less prominent individuals making all the bad press as US authorities flexed their muscles on crypto. Furthermore, the early teen industry still notched notable wins like Bitcoin's 160% surge. Industry players were overjoyed as courts judged in favor of crypto in two high-profile court cases (XRP and Coinbase). Moreover, there's pregnant anticipation regarding a long-awaited approval for a popular investment product in January, potentially bringing new investors. It was a year of cryptocurrency resiliency as digital assets benefited from cooling inflation and a growing economy. The year 2023 hit the road with an exuberant start, with the crypto market's entire market cap posting a $1.2 trillion gain (50%, according to AltCoinTrader). The gain somewhat reversed the damage occasioned by FTX's collapse, while Q2 saw the market take a breather to consolidate the gains. In Q2, a and other news about securities was the big news. The SEC approved Grayscale’s Bitcoin spot ETF approval and sparked a positive run in Q4. This pushed the crypto market cap to $1.65 trillion. 30% surge in Ethereum staking What Will 2023 Be Remembered For? BTC's Annual Low of $16,680 Bitcoin’s value slid from an all-time high of $69,000 in November 2021 to an all-time annual low of $16,800 in January 2023. This was a culmination of the sad events of 2022, like the collapse of the FTX cryptocurrency exchange that saw BTC's value continually decrease. Thankfully, Bitcoin later created a bullish candlestick that brought it close to $42,668 at the time of writing. https://twitter.com/dan_pantera/status/1734594848974315828?embedable=true Ripple Wins in SEC Case Ripple Labs Inc. scored a last July following a landmark ruling stating the firm never violated the federal securities law. US District Judge Analisa Torres's ground-breaking ruling that sent the XRP price surging by up to 75% and is considered a victory for the entire cryptocurrency industry is likely to galvanize other crypto firms toward battling the SEC amidst the ongoing regulatory confusion. partial victory against the SEC Later in October, the Bard Garlinghouse and executive Chairman Christian Larsen, making it a third consecutive win in the long-drawn legal tussle that had become a stain on Ripple and XRP. The SEC lawsuit that was filed in 2020 had accused Ripple Labs' executives of selling $1.3 billion in unregistered digital asset securities, with the pair personally accused of effecting at least $600 million in illicit securities sales. SEC dropped its case against Ripple CEO Journey towards the Approval of a Spot Bitcoin ETF The price of Bitcoin of $37,970 last October following BlackRock's taking initial steps towards an Ether Exchange-Traded Fund (ETF). BlackRock is among at least nine different asset management firms, including Valkyrie and WisdomTree, eagerly awaiting the SEC's approval of their desire to issue spot Bitcoin ETFs, which experts believe could happen . US-based investors can only buy Bitcoin futures ETFs from firms with futures contracts with plans to sell later at agreed-upon prices. The highly-anticipated Bitcoin spot ETFs awaiting SEC approval would enable users to invest in BTC directly and potentially make it accessible to the masses. scored an 18-month high in early 2024 SBF's High-Profile Trial After a , the highly-anticipated Sam Bankman-Fried (SBF) case returned a guilty verdict. The prosecutors accused the former founder of cryptocurrency exchange FTX of stealing and using billions of dollars belonging to his customers. Bankman-Fried may have maintained his innocence throughout the trial. However, the guilty verdict means he could earn . The sentencing is expected in March 2024. month-long trial up to 110 years in jail Bitcoin above $44K For the first time since April 2022, Bitcoin in early December. The digital asset that’s now trading at $42,643 brought the entire crypto market with it in its wake. That was a great achievement, considering it opened the year at less than $17,000. BTC's increasingly improving performance happens at a time when numerous respected Wall Street firms are awaiting the SEC's approval of their Bitcoin ETF application approvals. Analysts believe the SEC will likely approve the popular investment vehicle that tracks the digital asset's value and is expected to give traditional investors to crypto in a safe and regulated environment. crossed the $44,000 mark SEC against Binance and CZ Crypto billionaire Changpeng Zhao, the founder and CEO of Binance, was forced to step down after he pleaded guilty . According to the criminal charges filed by the SEC, both CZ and his firm, Binance, violated the Bank Secrecy Act. According to the Department of Justice (DOJ) documents, CZ and Binance agreed to a $4.3 billion settlement. to 13 charges facing him https://twitter.com/cz_binance/status/1727063503125766367?embedable=true The against the world's largest crypto exchange by trade volume and its founder, accusing them of commingling billions of dollars of customers' funds and sending them to a Europe-based company controlled by CZ. According to the US securities watchdog, CZ and his exchange subverted "their controls" by allowing high-net-worth American investors to trade at their unregulated international exchange. According to the complaint, the accused used Binance.US as a shield for CZ and the parent company to retard law enforcement and insulate Binance. SEC had filed 13 charges in June 2023 NFTs are Coming Back There's every sign of the as we draw the curtains on 2023. Despite what appeared like prices hitting rock bottom, major NFT brands like are seeing renewed interest in their products from online retailers and brick-and-mortar stores. Moreover, established firms are trooping back to the NFT space, with brand building expected to become a significant driver of Web3 adoptions in 2024 resurgence of interest in NFTs Pudgy Penguins https://twitter.com/pudgypenguins/status/1659325632499572736?embedable=true While mainstream media may have written off NFTs following their dismal performance and poor demand, stores like Walmart and others are jostling to sell them alongside physical products. They could end up building stronger NFT brands. There's every indication that the next wave of viral NFT products could be somewhat different from the previous successful ones by focusing on value creation instead of speculation. Moreover, they could center on large quantities sold at more affordable prices and target a broader market. Some companies that successfully experimented with mass-market NFTs include Starbucks, Mike, and Reddit, to name a few. Summary of 2023 Once again, the cryptocurrency market is experiencing unprecedented growth. Every indication is pointing towards an inevitable Bull-Run. It’s, therefore, important for every crypto enthusiast to equip themselves with knowledge and insight so they can make informed decisions. Should everything hold constant, we can expect a fresh liquidity boost from institutional investors as banks and other large investors allocate portions of their assets under cryptocurrencies. As it was in 201, 2017, and 2021, the emergence of new crypto projects is likely to become the foundation of a recent surge of users in 2024 and 2025, with the main driver being the adoption of Web3 by large Web projects and introduce a new audience to the crypto sphere.

Crazy Crypto Year - The Most Notable Events Of 2023

In our we talked about some of the most popular crypto brands and services in different categories. They included exchanges, stablecoins, wallets, and foundations. Now, it’s time to learn more categories of crypto names and brands you should know. previous article, As we mentioned before, according to the , They include exchanges, funds, marketplaces, market research, supply chain management, mining, payment ramps, investments, wallets, security, e-sports, gaming, Metaverses, trading, smart contracts, identity, and much more. Let’s discover what else they can offer!\ research firm Golden there are over 11,000 crypto companies and projects worldwide. Development Companies Not every cryptocurrency project or their development is led by non-profits. Indeed, there are a lot of (for-profit) companies behind popular coins and other crypto products. Let’s see some of them. Ripple Labs This American company promotes itself as “the leading provider of crypto solutions for businesses.” It was founded in 2012 by Chris Larsen and Jed McCaleb, and , which specializes in international payments. It’s also widely known for its legal battle against the US Securities and Exchange Commission (SEC). This entity accused them of selling non-registered securities (XRP) in the country. it’s better known for the creation of one of the most popular coins to date, XRP (originally Ripple) Lightning Labs Lightning Network is a second-layer solution for faster, cheaper transactions via off-chain payment channels —and likely the first-ever layer-2 (secondary chain). It was designed for Bitcoin, but it also works in Litecoin and . Lightning Labs, founded in 2016 by Elizabeth Stark and Olaoluwa Osuntokun, , and actively promoting Lightning Network adoption. other altcoins is a key American developer of Lightning Network technologies, offering products like LND and Neutrino Blockstream This is a Canadian blockchain company founded in 2014 by its current leader, Adam Back (a cryptographer cited in the Bitcoin whitepaper). mainly on Bitcoin-related services, Blockstream also supports the development of the first cryptocurrency by funding several Bitcoin Core open-source developers. They work including the sidechain Liquid and their satellite network to make offline transactions worldwide. More firms Of course, there are way more crypto developers for-profit. We can mention EMURGO and IOHK (Cardano/ADA), Solana Labs (Solana/SOL), Polygon Technology (Polygon/MATIC), Ava Labs (Avalanche/AVAX), Protocol Labs (Filecoin/FIL), TrustToken (Stablecoin issuer), Anchorage Digital (Crypto Infrastructure for Business), Galaxy Digital Holdings (Crypto Asset Management), Block/Square (Crypto Payment Processing), Chainalysis (Security and Analytics), and Digital Currency Group (venture capital and owner of CoinDesk, Foundry, Genesis Trading, Grayscale Investments, and Luno). Crypto News Portals These are websites or platforms dedicated to providing up-to-date information and analysis about different tokens and the crypto industry. They offer news, market data, educational content, and insights. Some of the most renowned are: CoinDesk It was founded in 2013 by entrepreneur Shakil Khan, and eventually acquired by the Digital Currency Group. It provides extensive cryptocurrency news, market data, and event coverage. , and also for reporting first the infamous balance that led FTX Exchange to bankruptcy. It’s known for its international-attended annual event Consensus Bitcoin Magazine Established in 2012 by Mihai Alisie and Vitalik Buterin (Ethereum founder), is still an influential crypto publication. It was sold in 2014 to BTC Inc., an American company. Bitcoin Magazine It offers articles, insights, and educational content about Bitcoin and other cryptocurrencies. CoinTelegraph It was established in 2013 by an international team, and it’s now based in the United States. offers a wide range of crypto news, interviews, analysis, and educational resources. Besides, The portal it’s available in eleven languages, including English, Arabic, Chinese, and Spanish. More portals Other popular crypto portals include Decrypt, CryptoSlate, NewsBTC, and CryptoPotato. These platforms provide a mix of news, analysis, market data, and educational content, catering to a diverse audience interested in cryptocurrency. You can also find more local crypto portals in every country, covering national news. Metaverses A crypto metaverse is a virtual, decentralized, and ledger-based environment where users can interact, create, play, and transact using digital assets within a shared, immersive, online space. You can have your own avatar on them, and this one could be a Non-Fungible Token (NFT). Decentraland Founded in 2017, Decentraland is an Ethereum-based metaverse. The creators, Ari Meilich and Esteban Ordano, originate from Argentina. . It also has its own native cryptocurrency, MANA. It offers a user-owned virtual world where users can buy, sell, and build on virtual lands (as NFTs) The Sandbox This crypto Metaverse was first a mobile game released in 2012 by the brand Pixowl. It was transformed into what it is today in 2021 by Animoca Brands. is now . It also offers customized avatars and has its own native coin, SAND. The Sandbox a 3D world based on Polygon where it’s possible to build your own games and NFTs without coding Alien Worlds It was released in 2020 by the firm Dacoco on the WAX blockchain. features six alien worlds where It’s also possible to host events and collect NFTs in the form of avatars, weapons, tools, and other items. This Metaverse explorers can go into missions, own digital lands, and mine Trilium (TLM). More crypto-verses Other notable crypto metaverses include CryptoVoxels, Somnium Space, and Upland. CryptoVoxels is an Ethereum-based virtual world for users to build and monetize spaces. Somnium Space is a VR-centric metaverse with a focus on social interactions. Upland merges the real world with digital ownership, allowing users to buy, sell, and trade virtual real estate. NFT Projects NFT projects, or Non-Fungible Token projects, create and sell unique digital assets that are indivisible and provably scarce on distributed networks. These tokens represent ownership of digital or physical items. Additionally, every project can offer unique features, experiences, and benefits to its owners. CryptoPunks This is likely the first-ever NFT collection, and it was released in 2017 by Larva Labs. All of them were for free initially, but now every piece is valued at over 60 ETH (around $92,880). The rarer units have been sold . It offers 10,000 unique 24x24 pixel art “punk” characters registered on Ethereum. given away for millions Axie Infinity Released in 2018 by the Vietnamese studio Sky Mavis, Players can collect, breed, train, and trade axies while earning rewards for doing it. The game has its own chain, Ronin, compatible with Ethereum. Currently, over 11.8 million axies, but only 422,830 are available to trade. it’s a play-to-earn battle game that features NFT creatures called “axies.” there are Bored Ape Yacht Club (BAYC) This collection was released in 2021 by Yuga Labs. They’re meant to represent membership in an exclusive virtual club with social and utility benefits. is currently developing its own Metaverse about it, called “Otherside.” It offers 10,000 “bored apes” images with unique traits, registered as NFTs on Ethereum. Yuga Labs A rain of NFTs There are innumerable NFTs at this point since practically anyone with Internet access can make their own. According to , The most popular projects include CrypToadz, Art Blocks, Pudgy Penguins, Azuki, Meebits, and CloneX. Now, remember that if you want to make your own NFTs, and sell them without coding in the Obyte-based NFT marketplace CryptoThings. NonFungible there were at least 3,724 NFT sales in the last week, amounting to over $2.5 million. it’s possible to create them Bonus: A Blacklist Some names are also important to remember but in a bad way. Seasoned crypto enthusiasts and analysts will talk about them a lot, so you also need to know what happened. Here we have several failed and/or infamous crypto projects that caused a lot of harm to the market in the past. Mt. Gox Founded in 2010 by Jed McCaleb and Mark Karpelès, Mt. Gox was a Japanese cryptocurrency exchange, and the largest of its time worldwide. It failed in 2014 due to serious security breaches, resulting in a massive loss of customer funds and insolvency. Terra (LUNA) Terra, created by Daniel Shin and Do Kwon in South Korea, was launched in 2018. Technically, it still exists, but its native stablecoin, Terra USD (UST), failed big in 2022. . A lot of people worldwide suffered the consequences, as their investments and savings in these coins were suddenly erased. Do Kwon was arrested in 2023. UST's price plummeted to $0.1 (90% less than its peg) in May, dragging LUNA (the native currency of Terra) down with it FTX Founded by Sam Bankman-Fried (SBF) and Gary Wang in 2017, FTX was the third-largest cryptocurrency exchange globally in 2021. Now, it's nothing but an infamous name. They faced serious liquidity issues to the point of going bankrupt in November 2022. and a lack of financial controls within the company. SBF was arrested in the US. Bankruptcy proceedings revealed massive debts (of around $3 billion), misuse of customer funds, For more blacklisted crypto names, you can check our list of the . Now, if you want to start in this complex world without complications, remember that you can download the user-friendly . Payments, smart contracts, chatbots, exchanges, and more are waiting for you without coding! biggest crypto crashes Obyte wallet Featured Vector Image by Freepik

Crypto for Beginners: Must-Know Brands and Names —Part 2

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SEC v. Ripple Court Filing, retrieved on July 13, 2023 is part of . You can jump to any part in this filing . This part is 1 of 18. HackerNoon’s Legal PDF Series here Introduction Plaintiff, the Securities and Exchange Commission (the “SEC”), brings this action against Defendants Ripple Labs, Inc. (“Ripple”) and two of its senior leaders, Bradley Garlinghouse and Christian A. Larsen, alleging that Defendants engaged in the unlawful offer and sale of securities in violation of Section 5 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. §§ 77e(a) and (c). Am. Compl. ¶¶ 9, 430–35, ECF No. 46. The SEC also alleges that Garlinghouse and Larsen aided and abetted Ripple’s Section 5 violations. Id. ¶¶ 9, 436–40. Before the Court are the parties’ cross-motions for summary judgment. ECF Nos. 824, 836; see also ECF Nos. 621, 625, 639, 642.[1] For the reasons stated below, the SEC’s motion is GRANTED in part and DENIED in part, and Defendants’ motion is GRANTED in part and DENIED in part. [1] Portions of the briefs, Rule 56.1 statements, and other documents discussed in this order were filed under seal or redacted. See ECF No. 819 (granting in part and denying in part the parties’ and third parties’ motions to seal). These materials are “judicial documents” because they are “relevant to the performance of the judicial function and useful in the judicial process.” Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006); see also Bernstein v. Bernstein Litowitz Berger & Grossmann LLP, 814 F.3d 132, 139 (2d Cir. 2016). To the extent that information in these documents is disclosed in this order, the privacy and business interests that justified their sealing or redaction are outweighed by “the public’s right of access to [information] necessary to understand the basis for court rulings.” Spinelli v. Nat’l Football League, 903 F.3d 185, 193 n.2 (2d Cir. 2018); see also Dodona I, LLC v. Goldman, Sachs & Co., 119 F. Supp. 3d 152, 155 (S.D.N.Y. 2015). Continue Reading . here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case 1:20-cv-10832-AT-SN retrieved on September 7, 2023, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox

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