The SEC Enforcement Director resigned hours before the Ripple case was appealed. There is currently significant uncertainty regarding the outcome of the Ripple v. SEC case.
The U.S. Securities and Exchange Commission (SEC) has filed an appeal against a ruling that XRP is not a security when traded on an exchange. Shortly before the appeal, the SEC announced the resignation of Enforcement Director Gurbir S. Grewal. This news sparked a debate about the future of the SEC v. Ripple case.
Grewal’s involvement in the SEC v. Ripple case
Grewal has served as SEC Director of Enforcement since 2021 and will officially retire from his position on October 11th. Due to his “regulation through enforcement” strategy, Grewal was often referred to as the anti-cryptocurrency chief during his tenure at the SEC. His priorities were to punish criminals, adjust fines, and make sure no one got away with violating SEC rules.
Under Mr. Grewal’s leadership, the SEC has handled more than 2,400 enforcement cases, resulting in more than $20 billion in disgorgement and fines against cryptocurrency companies. In just three years, Grewal has orchestrated over 100 enforcement actions against cryptocurrency companies.
The ongoing legal battle between Ripple and the SEC is one of the most discussed cases under Ghubir Grewal. In 2020, the SEC went after Ripple for selling unregistered XRP securities. Years later, Ripple and the SEC won a partial victory in this case.
A court found Ripple guilty of selling XRP to institutional investors, and the SEC asked for a $2 billion fine. However, the blockchain company countered this proposal with $10 million.
Instead, as CNF previously noted, the court ruled that Ripple must pay a $125 million penalty. However, Grewal appealed, arguing that the district court’s ruling against Ripple contradicted decades of precedent.
Prior to joining the SEC, Mr. Grewal served as New Jersey Attorney General from 2018 to 2021. He also served as prosecutor for Bergen County, the most populous county in New Jersey. His expertise as an experienced prosecuting attorney will give the SEC some leverage in the fight against Ripple.
What’s next for the SEC vs. Ripple XRP appeal after Grewal resigns?
Now that Grewal has announced his resignation, market participants are wondering what will happen after the appeal.
Mr. Sanjay Wadhwa, Deputy Director, Enforcement Department, will be appointed as Acting Director. Sam Waldon, Chief Counsel in the Enforcement Division, will take over Wadhwa’s current role as Acting Deputy Director.
Mr. Wadhwa has worked with the SEC for more than 20 years and has a track record of taking tough actions against insider trading and market manipulation. He spearheaded efforts to stop American Depositary Receipt (ADR) fraud, which resulted in more than $430 million in fines. He also fired Galleon Management founder Raj Rajaratnam and other officials at Wall Street’s largest hedge fund.
For now, it remains unclear who the SEC intends to promote to become the SEC’s Permanent Director of Enforcement. As for Ripple, XRP investors will be keeping an eye on the SEC’s future response to this incident. The progress and ultimate conclusion of the litigation will be important to the future valuation of XRP.
At the time of writing, the price of XRP has fallen 11.4% in 24 hours to $0.519. However, trading volume continued to surge 16.8% during the same period to $3.2 billion.
