The ongoing XRP SEC lawsuit has entered a critical phase, with the U.S. Securities and Exchange Commission (SEC) and Ripple Labs presenting their arguments in the remedies phase. As the parties await Judge Torres' final judgment, experts believe the decision could come as early as Q3 2024.

Sealing Details and Potential Penalties

The disputes in the remedies phase revolve around sealing some details about Ripple's financial results and post-complaint XRP sales to institutional investors. The SEC opposes Ripple's motion to seal this information, claiming it is key to the court's decisions and the public's understanding of the penalties amount. The SEC seeks $2 billion in total fines, while Ripple asserts it is only liable to pay civil penalties not exceeding $10 million. However, courts typically set the actual amount lower than the initial request.

Impact of the Crypto Bill and Retrospective Application

The U.S. House of Representatives recently voted on the Financial Innovation and Technology for the 21st Century Act (FIT21), a significant step towards a regulatory framework for trading and issuance of digital assets. While the crypto bill could impact other lawsuits, such as those involving Coinbase and Binance, its retrospective application to the XRP lawsuit is questionable. Lawyer Bill Morgan believes the legislation will not change the court's previous finding that XRP is not itself a security, as the SEC has already made it clear they will not challenge this judgment.

Permanent Injunction and ODL Transactions

The SEC seeks a permanent injunction to stop ODL sales, even though none of the sales to institutions with discounts were ODL contracts. The judge can grant a permanent injunction based on the current situation, as U.S. ODL transactions no longer use XRP. This potential injunction could work around the FIT21 if the law is passed.

Ripple's Readiness and the Motion to Seal

Despite the SEC's opposition, experts believe Ripple will largely lose the motion to seal. The company appears ready to face the consequences of Judge Torres' final judgment in the remedies phase, which could come much earlier than expected. As the XRP SEC lawsuit continues to unfold, the crypto community closely follows the developments, anticipating clarity on the future of XRP and the broader implications for the industry.