Important Ripple v. SEC Update June 18th: Commission Takes a Hit

TL;DR

• David Hirsh, Chief of the Crypto Asset and Cyber Unit at the SEC, recently resigned, denying rumors of joining a Solana-based marketplace.
• His departure comes as the SEC’s lawsuit against Ripple progresses, with the regulator recently lowering its proposed penalty to $102.6 million.

The Crypto Expert Resigns

David Hirsh – one of the longstanding members of the United States Securities and Exchange Commission (SEC) – announced on LinkedIn that he resigned from the agency. He served as Chief of the Crypto Asset and Cyber Unit in the Division of Enforcement, spending nine years with the regulator. 

Hirsh took the opportunity to thank all his colleagues, mentors, and friends for their support over the years, highlighting the work that has been done:

“As I often say, securities enforcement is a team sport, and that was certainly true throughout my tenure. Every success I was a part of was the direct result of collaboration and combined efforts towards a common goal. Thanks to all of you!”

He revealed that his career will enter a new chapter soon, but first, he will dedicate his time to family and travel. Some reports hinted that Hirsh has resigned from the SEC to start working for pump.fun, a Solana-based marketplace that enables users to create and distribute their own tokens. The American denied the rumors, labeling them “false.”

Good News for Ripple?

Hirsh’s resignation comes at a pivotal time with the lawsuit between the SEC and Ripple reaching its trial stage. The spat between the entities has been ongoing since December 2020 when the watchdog accused the company and some of its executives of conducting an unregistered securities offering by selling its XRP token.

Most recently, both parties have been clashing over the size of Ripple’s potential penalty. Initially, the SEC sought a $2 billion fine on the firm, while the latter argued it should not exceed $10 million. A few days ago, the agency softened its tone, proposing a $102.6 million penalty:

“Ripple avoids comparing the Terraform settlement’s penalty to the gross profit of the violative conduct. That ratio ($420 million/$3.587 billion) is significantly higher: 11.7%. Applying it to the $876.3 million in gross profits, the SEC here asks the court to disgorge, which results in a much larger figure, a $102.6 million penalty, than the $10 million ceiling Ripple insists on.”

Some might view the SEC as the underdog in the case, considering the three partial court wins secured by the company throughout 2023. XRP’s price positively reacted to each victory, meaning a decisive victory for Ripple may trigger substantial volatility again. Those curious to learn more about the lawsuit and its impact on Ripple’s native token, please check our video below: