INVESTING NEWS: SEC seeks $2 bln from Ripple Labs over XRP sales, legal officer says

The U.S. Securities and Exchange Commission (SEC) is pursuing a $2 billion fine against Ripple Labs for what it deems unlawful sales of the XRP cryptocurrency, as disclosed by Ripple's Chief Legal Officer, Stuart Alderoty. The legal action follows a July ruling by Judge Analisa Torres, stating Ripple's nearly $730 million in XRP sales to hedge funds and sophisticated investors were unregistered security sales. Ripple plans to appeal in April.

The SEC's lawsuit against Ripple and its executives, initiated in 2020, challenges over $1.3 billion raised through these unregistered securities sales. However, Judge Torres found that Ripple's XRP sales on public exchanges did not constitute such sales, highlighting a complex legal battle that could significantly influence crypto token regulation and the industry's future.

The case underscores the ongoing debate over whether crypto tokens are securities, which should be regulated under securities law, or digital commodities, potentially overseen by the Commodity Futures Trading Commission. The outcome of the SEC-Ripple litigation may set a precedent for how digital assets are regulated, impacting the broader cryptocurrency market and the development of future regulations.

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