Ripple Labs Seeks Temporary Hold On Monetary Penalty Amid Ongoing SEC Battle
Ripple Labs is seeking a temporary hold on the monetary court decision that was issued on August 7 as part of the ongoing legal battle with the Securities and Exchange Commission (SEC). The request, which has the SEC’s permission, seeks to postpone the payment of the monetary penalty, initially due on September 6, 2024.
Ripple submitted a letter asking the court to act before the deadline for the request. This legal maneuver is backed by the Federal Rule of Civil Procedure, which allows for a stay of judgment if security is provided. Ripple and the SEC have agreed on an alternative form of security. Ripple suggests setting aside 111% of the judgment amount into a separate account managed by Kellogg, Hansen, Todd, Figel & Frederick P.L.L.C., its legal counsel.
Ripple’s Fund Management During Stay Period
As per the proposed order, this stay will be in effect for 30 days from the date when the appeal was due, and no appeal was filed or until the appeal is decided. For this time period, the SEC will be entitled to receive post-judgment interest, which is indicated in the judgment.
Ripple will keep the ownership of the deposited funds, but the account will be outside of its control. The account will be managed by Kellogg Hansen who will ensure that the funds will be there until they are either used to fulfill the judgment, other payment methods are arranged, or the decision is overturned.
The arrangement allows Ripple to be free from the financial problem and the risk that comes with the security bond, which assures the judgment is paid. This approach also addresses the SEC’s need for assurance that the funds will be available if required. The proposed terms do not affect the public or third parties adversely.
In this Order, it is directed that Kellogg Hansen will not assume any further responsibilities except for ensuring that the funds stay in the account, unless ordered to do otherwise. I If the judgment is varied or reversed by the Court of Appeals, Ripple and the SEC will negotiate the disposal of the funds in good faith. Disputes which can’t be settled amicably shall be referred to the court for adjudication.
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