The SEC's lawsuit against Ripple has entered a critical phase, with Judge Torres expected to issue a final judgment in the third quarter of 2024. This decision will follow the resolution of the motion to seal, a contentious issue between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs. Both parties have made their arguments, and the dispute mainly focuses on Ripple's financial details and the sealing of XRP sales to institutional investors.

Legal experts predict that the verdict may come sooner than expected. The outcome of this phase is being closely watched by all parties involved, including third parties with an interest in it.

Is XRP's Legal Status in the U.S. in Danger?

In an important move, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21). The bill seeks to establish a regulatory framework for digital asset trading and issuance and defines the roles of the U.S. Commodity Futures Trading Commission (CFTC) and the SEC in regulating the crypto industry. If passed, the law will affect ongoing lawsuits against major players such as Coinbase, Binance, and Ripple.

Impact of FIT21 Act on SEC - Source: X

This legislative move raises questions about the decentralization of XRP. Lawyer Bill Morgan clarified:

Ripple’s preparedness for SEC fine

Recently, the SEC opposed Ripple’s motion to seal evidence.

The SEC believes that Ripple’s revised request will obscure important public information necessary for the court’s decision and the public’s understanding of the penalty. This includes detailed information about Ripple’s current assets, recent sales, revenues, expenses, and discounts offered to institutional investors.

The SEC is seeking a total fine of $2 billion. However, Ripple argues that it should only pay a civil penalty of no more than $10 million. Courts typically do not accept the amounts initially proposed by parties, suggesting that the final amount could be significantly lower.

Discussing Ripple’s ODL sales and legal implications - Source: X

Bill Morgan predicted that Ripple will essentially lose the seizure motion. He also noted that the SEC clarified that no ODL contract sales were made to institutions that received discounts. Despite this, the SEC still sought a permanent injunction to block ODL sales.

XRP’s price has remained range-bound as the legal proceedings proceed. Market analysts believe that this stability reflects uncertainty about the outcome of the proceedings. Investors and traders are closely following the progress of the case, especially Judge Torres’ final decision and the potential impact of the FIT21 Act.

XRP 1-month price chart - Source: CoinMarketCap