The United States Securities and Exchange Commission (SEC) was unsuccessful in its action against Aron Govil. This decision, widely discussed on social media platform X, appears to be advantageous for Ripple, the renowned payment solutions company using blockchain.
According to Stuart Alderoty, chief legal officer at Ripple, the Second Circuit Court of Appeals upheld the decision not to reconsider the SEC vs. SEC case. Govil, which means that “without financial loss on the part of the buyer, there is no SEC right to reimbursement from the seller.” Last year, Alderoty argued that the SEC it could not request extreme restitution without proving actual financial harm to investors.
An Australian lawyer specializing in cryptocurrencies commented on the case on Network X, indicating that while the SEC relies on Govil to assert that refunds must correspond to the “illicit gain” in case of financial losses, the decision is a positive for Ripple , if it is proven that institutional investors were not harmed.
The SEC continues to lose. The Second Circuit Court of Appeals refused to reconsider their decision in Govil which held that if a buyer suffers no financial loss, the SEC is not entitled to disgorgement from the seller. https://t.co/AOEHcyiajo pic.twitter.com/TPCbmAcAmY
— Stuart Alderoty (@s_alderoty) April 11, 2024
In contrast, the SEC claims that refunds must include all revenue from Ripple's institutional sales, subtracting the cost of associated expenses. Expenses totaled US$115 million, against sales that totaled US$991 million, according to the Commission.
Morgan, an industry analyst, emphasized that if Ripple proves the absence of financial losses among institutional investors, the court decision is in favor of the company.
In addition, the SEC intends to impose fines and penalties on Ripple that reach US$2 billion in a process that, according to Brad Garlinghouse, CEO of Ripple, and Alderoty, does not involve accusations of fraud. This point is crucial to the development of this litigation between Ripple and the regulatory body.
