In a significant turn of events, a stay of the monetary penalties has been requested by the behemoth payment firm Ripple Labs as its lengthy legal dispute with the United States Securities and Exchange Commission (SEC) continues to unfold.
Ripple Takes Bold Step With Stay Request
On Wednesday, the Ripple team in a letter filed a demand for a stay of the monetary portion, particularly the $125 million fine of the court’s previous judgment. The plea was made in an effort by the company to postpone the financial penalties that the court had imposed pending the outcome of the case over whether or not its XRP token is considered a security on August 7, 2024.
Ripple humbly demands that the Southern District Court of New York take action on the stay motion prior to September 6, which is when the monetary portion of the judgment is now due to be paid. Meanwhile, the US SEC has already greenlighted the delay request.
The letter read:
Plaintiff, the US SEC has consented to this request and to the terms of the Proposed Order that Ripple is submitting today. The monetary portion of the judgment is currently due to be paid this coming Friday, September 6, and Ripple respectfully asks that this court act on this stay request before that date.
Specifically, this move implies that the payment company is putting the $125 million fine into an escrow account. Should the regulatory watchdog choose not to appeal the motion, the funds will be released once the deadline has been surpassed.
However, if the agency decides not to file an appeal, the funds will go to Ripple Labs. Since the SEC approved these terms, the company has insurance under this agreement.
According to the filing, the stay will be in effect under the proposed order for 30 days following the appeal period’s expiration or any appeal decision. As specified in the judgment, the SEC will receive post-judgment interest during this period.
Furthermore, the fund and any interest that arises from its deposit in the escrow account registered under the name Kellogg Hansen will be owned beneficially by Ripple, with no control over it.
Industry Response To The Motion
Ripple’s motion for stay has triggered quite a frenzy within the community regarding whether the regulatory watchdog will file for an appeal. As a result, popular lawyer James A. Murphy, also known as the MetaLawMan, has delved into the case, offering insights into the potential outcome.
According to the lawyer, the only two options at this time are either the SEC is still unsure or has decided to appeal. However, considering the development, the attorney is confident that the SEC will appeal the motion because Ripple would have been forced to pay the $125 million fine if the Commission opted not to do so.
As the legal battle intensifies, this development represents another turning point in the case that might have long-term effects on the crypto industry.
Featured image from iStock, chart from Tradingview.com