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SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 1 of 5. Plaintiff, the Securities and Exchange Commission (the “SEC”), brings this action against Defendant, Ripple Labs, Inc. (“Ripple”), alleging that Ripple engaged in the unlawful offer and sale of securities in violation of Section 5 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77e(a), (c). Am. Compl. ¶¶ 9, 430–35, ECF No. 46. On July 13, 2023, the Court granted in part and denied in part the parties’ cross-motions for summary judgment (the “Order”). Order, ECF No. 874; see SEC v. Ripple Labs, Inc., 682 F. Supp. 3d 308 (S.D.N.Y. 2023), motion to certify appeal denied, 697 F. Supp. 3d 126 (S.D.N.Y. 2023). Now before the Court is the SEC’s motion for remedies and the entry of final judgment. [1] SEC Mot., ECF No. 948; SEC Mem., ECF No. 949; Proposed Judgment, ECF No. 950. For the reasons stated below, the SEC’s motion is GRANTED IN PART and DENIED IN PART. BACKGROUND[2] This case involves Defendants’ offer and sale of XRP, the native digital token of the XRP Ledger, a cryptographically secured ledger or “blockchain.” Order at 2. On December 22, 2020, the SEC commenced this action. See Complaint, ECF No. 1. An amended complaint was filed on February 18, 2021. ECF No. 46. As relevant here, the SEC alleged that Ripple engaged in three categories of unregistered XRP offers and sales: (1) Institutional Sales[3] under written contracts for which it received $728 million; (2) Programmatic Sales on digital asset exchanges for which it received $757 million; and (3) Other Distributions under written contracts for which it recorded $609 million in “consideration other than cash.” Id. at 15–16; see id. at 4–5. The SEC also alleged that Bradley Garlinghouse and Christian A. Larsen, two of Ripple’s senior leaders, engaged in unregistered individual XRP sales from which they received at least $450 million and $150 million, respectively. Id. at 5, 16. Under Section 5 of the Securities Act, it is “unlawful for any person, directly or indirectly, . . . to offer to sell, offer to buy or purchase[,] or sell” a “security” unless a registration statement is in effect or has been filed with the SEC as to the offer and sale of such security to the public. 15 U.S.C. §§ 77e(a), (c), (e). To prove a violation of Section 5, the SEC must show: (1) that no registration statement was filed or in effect as to the transaction, and (2) that the defendant directly or indirectly offered to sell or sold the securities (3) through interstate commerce. See SEC v. Cavanagh, 445 F.3d 105, 111 n.13 (2d Cir. 2006). At summary judgment, the Court—applying the Supreme Court’s test set forth in SEC v. W.J. Howey Co., 328 U.S. 293 (1946)—concluded that Ripple’s Institutional Sales constituted offers or sales of investment contracts, but that Ripple’s Programmatic Sales and Other Distributions did not. Order at 30. The Court also held that Larsen’s and Garlinghouse’s individual sales were not offers or sales of investment contracts for “substantially the same reasons” stated in the Court’s analysis of Ripple’s Programmatic Sales. Id. at 27–28. The SEC subsequently moved to certify for interlocutory appeal the Court’s holdings on Programmatic Sales and Other Distributions. ECF No. 892. On October 3, 2023, the Court denied the SEC’s motion and set for trial the SEC’s claim that Larsen and Garlinghouse aided and abetted Ripple’s violations of Section 5 with regard to the Institutional Sales. ECF No. 917. By stipulation dated October 19, 2023, the SEC dismissed its pending claims against Larsen and Garlinghouse, obviating the need for a trial. ECF No. 921. Now before the Court is the SEC’s motion for remedies and entry of judgment on Ripple’s violations of Section 5 as to the Institutional Sales. The SEC seeks a final judgment against Ripple that (1) permanently enjoins it from future violations of Section 5 and from conducting an unregistered offering of XRP in Institutional Sales; (2) orders Ripple to pay $876,308,712 in disgorgement and $198,150,940 in prejudgment interest; and (3) orders Ripple to pay an $876,308,712 civil penalty. SEC Mem. at 1. Ripple contends that an injunction and disgorgement are unwarranted, and that any civil penalty should not exceed $10 million. See Ripple Opp., ECF No. 955. Continue Reading Here. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. [1] Ripple has also moved to seal certain documents filed in connection with the SEC’s motion. ECF No. 963; see ECF Nos. 964–68. The Court will address the sealing requests by separate order. [2] The Court presumes familiarity with the facts and procedural history of this matter as detailed in prior orders, see Order at 2–9, and, therefore, only summarizes those facts necessary for its decision here. [3] Capitalized terms not otherwise defined herein have the meanings set forth in the Order. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 1 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 1 of 5. HackerNoon’s Legal PDF Series here Plaintiff, the Securities and Exchange Commission (the “SEC”), brings this action against Defendant, Ripple Labs, Inc. (“Ripple”), alleging that Ripple engaged in the unlawful offer and sale of securities in violation of Section 5 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77e(a), (c). Am. Compl. ¶¶ 9, 430–35, ECF No. 46. On July 13, 2023, the Court granted in part and denied in part the parties’ cross-motions for summary judgment (the “Order”). Order, ECF No. 874; see SEC v. Ripple Labs, Inc., 682 F. Supp. 3d 308 (S.D.N.Y. 2023), motion to certify appeal denied, 697 F. Supp. 3d 126 (S.D.N.Y. 2023). Now before the Court is the SEC’s motion for remedies and the entry of final judgment. [1] SEC Mot., ECF No. 948; SEC Mem., ECF No. 949; Proposed Judgment, ECF No. 950. For the reasons stated below, the SEC’s motion is GRANTED IN PART and DENIED IN PART. BACKGROUND[2] This case involves Defendants’ offer and sale of XRP, the native digital token of the XRP Ledger, a cryptographically secured ledger or “blockchain.” Order at 2. On December 22, 2020, the SEC commenced this action. See Complaint, ECF No. 1. An amended complaint was filed on February 18, 2021. ECF No. 46. As relevant here, the SEC alleged that Ripple engaged in three categories of unregistered XRP offers and sales: (1) Institutional Sales[3] under written contracts for which it received $728 million; (2) Programmatic Sales on digital asset exchanges for which it received $757 million; and (3) Other Distributions under written contracts for which it recorded $609 million in “consideration other than cash.” Id. at 15–16; see id. at 4–5. The SEC also alleged that Bradley Garlinghouse and Christian A. Larsen, two of Ripple’s senior leaders, engaged in unregistered individual XRP sales from which they received at least $450 million and $150 million, respectively. Id. at 5, 16. Under Section 5 of the Securities Act, it is “unlawful for any person, directly or indirectly, . . . to offer to sell, offer to buy or purchase[,] or sell” a “security” unless a registration statement is in effect or has been filed with the SEC as to the offer and sale of such security to the public. 15 U.S.C. §§ 77e(a), (c), (e). To prove a violation of Section 5, the SEC must show: (1) that no registration statement was filed or in effect as to the transaction, and (2) that the defendant directly or indirectly offered to sell or sold the securities (3) through interstate commerce. See SEC v. Cavanagh, 445 F.3d 105, 111 n.13 (2d Cir. 2006). At summary judgment, the Court—applying the Supreme Court’s test set forth in SEC v. W.J. Howey Co., 328 U.S. 293 (1946)—concluded that Ripple’s Institutional Sales constituted offers or sales of investment contracts, but that Ripple’s Programmatic Sales and Other Distributions did not. Order at 30. The Court also held that Larsen’s and Garlinghouse’s individual sales were not offers or sales of investment contracts for “substantially the same reasons” stated in the Court’s analysis of Ripple’s Programmatic Sales. Id. at 27–28. The SEC subsequently moved to certify for interlocutory appeal the Court’s holdings on Programmatic Sales and Other Distributions. ECF No. 892. On October 3, 2023, the Court denied the SEC’s motion and set for trial the SEC’s claim that Larsen and Garlinghouse aided and abetted Ripple’s violations of Section 5 with regard to the Institutional Sales. ECF No. 917. By stipulation dated October 19, 2023, the SEC dismissed its pending claims against Larsen and Garlinghouse, obviating the need for a trial. ECF No. 921. Now before the Court is the SEC’s motion for remedies and entry of judgment on Ripple’s violations of Section 5 as to the Institutional Sales. The SEC seeks a final judgment against Ripple that (1) permanently enjoins it from future violations of Section 5 and from conducting an unregistered offering of XRP in Institutional Sales; (2) orders Ripple to pay $876,308,712 in disgorgement and $198,150,940 in prejudgment interest; and (3) orders Ripple to pay an $876,308,712 civil penalty. SEC Mem. at 1. Ripple contends that an injunction and disgorgement are unwarranted, and that any civil penalty should not exceed $10 million. See Ripple Opp., ECF No. 955. Continue Reading Here. Continue Reading Here . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com [1] Ripple has also moved to seal certain documents filed in connection with the SEC’s motion. ECF No. 963; see ECF Nos. 964–68. The Court will address the sealing requests by separate order. [2] The Court presumes familiarity with the facts and procedural history of this matter as detailed in prior orders, see Order at 2–9, and, therefore, only summarizes those facts necessary for its decision here. [3] Capitalized terms not otherwise defined herein have the meanings set forth in the Order.

SEC Seeks Over $1.7 Billion in Penalties from Ripple Labs for Alleged XRP Securities Law Violations

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This is the table of links with all parts. Case Number: 1:20-cv-10832-AT-SN Plaintiffs: Securities and Exchange Commission Defendant: Ripple Labs, Inc. Filing Date: August 07, 2024 Location: United States District Court Southern District of New York Table of Content Background Discussion I. Injunctive Relief
II. Disgorgement
III. Civil Penalties Conclusion About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This is the table of links with all parts. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This is the table of links with all parts. HackerNoon’s Legal PDF Series here Case Number: 1:20-cv-10832-AT-SN Case Number: Plaintiffs: Securities and Exchange Commission Plaintiffs: Defendant: Ripple Labs, Inc. Defendant: Filing Date: August 07, 2024 Filing Date: Location: United States District Court Southern District of New York Location: Table of Content Background Background Discussion I. Injunctive Relief II. Disgorgement III. Civil Penalties I. Injunctive Relief I. Injunctive Relief II. Disgorgement II. Disgorgement III. Civil Penalties III. Civil Penalties Conclusion Conclusion About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com

Court Orders Ripple to Stop Selling XRP, Imposes $125 Million Penalty

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 5 of 5. CONCLUSION The SEC’s motion for remedies and the entry of final judgment is GRANTED IN PART and DENIED IN PART. The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150. The Clerk of Court is directed to terminate the motions at ECF Nos. 943, 948, and 951. SO ORDERED. Dated: August 7, 2024 New York, New York About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 5 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 5 of 5. HackerNoon’s Legal PDF Series here CONCLUSION The SEC’s motion for remedies and the entry of final judgment is GRANTED IN PART and DENIED IN PART. The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150 . The Clerk of Court is directed to terminate the motions at ECF Nos. 943, 948, and 951. $125,035,150 SO ORDERED. Dated: August 7, 2024 New York, New York About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com

Ripple Hit with $125 Million Fine in SEC Lawsuit

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 4 of 5. III. Civil Penalties A. Legal Standard The SEC is also authorized to seek the imposition of civil monetary penalties, which serve “the dual goals of punishment of the individual violator and deterrence of future violations.” Off. Comm. of Unsecured Creditors of WorldCom, Inc. v. SEC, 467 F.3d 73, 81 (2d Cir. 2006) (quotation marks and citation omitted). “Courts can impose penalties in civil injunctive actions not to exceed the greater of: (i) the gross pecuniary gain to a defendant as a result of the violation, or (ii) a specified amount per violation, depending on whether the violation falls in the first, second[,] or third penalty tier.” SEC v. Bajic, No. 20 Civ. 07, 2023 WL 6289953, at *4 (S.D.N.Y. Sept. 27, 2023) (citing 15 U.S.C. § 77t(d)(2); 15 U.S.C. § 78u(d)(3)(B)). A court may impose a first-tier penalty for any violation of the Exchange or Securities Acts; a second-tier penalty if the violation “involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement”; and a third-tier penalty if, in addition to meeting the second-tier requirements, the “violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.” Id. (citations omitted). Because “[t]he term ‘violation’ is not defined by the statutory scheme,” courts have discretion to determine the unit of violation for the purposes of imposing civil penalties under the tier method. SEC v. Fowler, 6 F.4th 255, 264 (2d Cir. 2021); see id. at 265. Although gross pecuniary gain or “the tier determines the maximum penalty, . . . the actual amount of the penalty [is] left up to the discretion of the district court.” SEC v. Kern, 425 F.3d 143, 153 (2d Cir. 2005). In determining the appropriate penalty, courts may consider factors including: (1) the egregiousness of the defendant’s conduct; (2) the degree of the defendant’s scienter; (3) whether the defendant’s conduct created substantial losses or the risk of substantial losses to other persons; (4) whether the defendant’s conduct was isolated or recurrent; and (5) whether the penalty should be reduced due to the defendant’s demonstrated current and future financial condition. SEC v. Rajaratnam, 918 F.3d 36, 44 (2d Cir. 2019) (citation omitted); see also id. at 45 (noting that the list is not exhaustive); cf. Fowler, 6 F.4th at 266 (noting that the Circuit has not held that “the civil penalty for a securities fraud offense needs to be proportional to the disgorgement amount”). The Court may also consider “the extent to which other aspects of the relief and/or judgment issued in this matter will have the desired punitive effect.” SEC v. Universal Exp., Inc., 646 F. Supp. 2d 552, 568 (S.D.N.Y. 2009), aff’d, 438 F. App’x 23 (2d Cir. 2011). B. Application The SEC asks the Court to impose a penalty of $876,308,712, equal to the net profits it calculates for the Institutional Sales. SEC Mem. at 23. Ripple argues that a penalty of no more than $10 million, or “about [redacted] of Ripple’s actual gross revenues . . . from pre-Complaint Institutional Sales,” is appropriate. Ripple Opp. at 30 (citation omitted). The Court finds that a first-tier penalty is appropriate in this case, which involves no allegations of “fraud, deceit, [or] manipulation,” and no conclusively established “deliberate or reckless disregard of a regulatory requirement.” 15 U.S.C. § 77t(d)(2)(B); see supra Part I.B. Although Ripple’s gross pecuniary gain from the Institutional Sales sets a higher statutory ceiling, the Court finds that the tier-analysis method more closely tailors the penalty to the scope of Ripple’s actual wrongdoing than the parties’ (virtually) all-or-nothing requests. As to the amount of the penalty, the Court has discussed the second and fourth Rajaratnam factors, which overlap with the factors relevant to injunctive relief, above. See supra Part I.B. On the first factor, the egregiousness of Ripple’s conduct, there is no question that the recurrent, highly lucrative violation of Section 5 is a serious offense. However, this case does not involve allegations of fraud, misappropriation, or other more culpable conduct. Relatedly, as to the third factor, the SEC has not established that Ripple’s failure to register the Institutional Sales caused substantial losses (or the risk thereof) to investors. See supra Part II.B. And, on the fifth factor, Ripple does not contest that its current financial condition does not merit a reduced penalty. See Ripple Opp. at 28–29. Beyond the Rajaratnam factors, the Court considers that Ripple will not be ordered to pay disgorgement, which dictates in favor of a larger penalty to accomplish “the desired punitive effect.” Universal Exp., Inc., 646 F. Supp. 2d at 568. The Court finds, therefore, that a perviolation penalty at the first-tier maximum is appropriate. The final step is to define and count the “violations” involved in the Institutional Sales. Because Section 5’s registration requirement is “transaction-specific,” it follows that each unregistered transaction constitutes a separate violation of the statute. Cavanagh, 155 F.3d at 133; see also SEC v. Colonial Inv. Mgmt. LLC, 381 F. App’x 27, 29 (2d Cir. 2010) (summary order) (affirming per-transaction penalties calculation). The SEC suggests that each of Ripple’s “1,700 relevant contracts” constitutes a separate violation. SEC Mem. at 23–24 n.8. Ripple responds that the “1,700 relevant contracts” figure includes “hundreds of contracts related to Programmatic Sales and Other Distributions,” which should be excluded. Ripple Opp. at 19 n.20. But, Ripple does not offer its own tabulation of the relevant contracts, and the SEC does not respond to Ripple’s contention in its reply brief. Based on the Court’s independent analysis of Ripple’s expert report summarizing the relevant contracts, see Schwarz Rep., ECF No. 582-7, the Court finds that 1,278 transactions violated Section 5, resulting in a civil penalty of $125,035,150. [10] Accordingly, the SEC’s request for a civil monetary penalty is GRANTED in part, and the Court will impose a penalty of $125,035,150. Continue Reading Here. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. [10]  The Court arrived at this figure by first tabulating the 1,278 “Sales Contracts” listed in Exhibit C of the expert’s report, which excluded “Programmatic Contracts,” “Service Contracts,” and “Other Contracts.” Schwarz Rep. at 80–124; see id. ¶¶ 18–55. The Court then determined the applicable penalty for each contract based on its date. See 17 C.F.R. § 201.1001, Tbl. I; Adjustments to Civ. Monetary Penalty Amounts, Release No. 6521, 2024 WL 111023 (Jan. 5, 2024) (“Release No. 6521”). For contracts entered into on or after November 2, 2015, the penalty is currently $115,231 per contract. Release No. 6521. For contracts entered into between March 6, 2013 and November 2, 2015, the penalty is $80,000 per contract. 17 C.F.R. § 201.1001, Tbl. I. And, for contracts entered into between March 4, 2009 and March 5, 2013, the penalty is $75,000 per contract. Id. For the four undated contracts, the Court applied the current inflation-adjusted penalty amount. Finally, the Court totaled the per-contract penalties to arrive at a civil penalty of $125,035,150. This sum is concededly an estimate of the maximum first-tier penalty; it is possible that the contracts listed in Exhibit C are either an incomplete or overinclusive list of Ripple’s Institutional Sales during the relevant period. Because neither party provided a more specific calculation, however, the Court believes that its estimate is an adequate approximation. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 4 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 4 of 5. HackerNoon’s Legal PDF Series here III. Civil Penalties A. Legal Standard A. Legal Standard The SEC is also authorized to seek the imposition of civil monetary penalties, which serve “the dual goals of punishment of the individual violator and deterrence of future violations.” Off. Comm. of Unsecured Creditors of WorldCom, Inc. v. SEC, 467 F.3d 73, 81 (2d Cir. 2006) (quotation marks and citation omitted). “Courts can impose penalties in civil injunctive actions not to exceed the greater of: (i) the gross pecuniary gain to a defendant as a result of the violation, or (ii) a specified amount per violation, depending on whether the violation falls in the first, second[,] or third penalty tier.” SEC v. Bajic, No. 20 Civ. 07, 2023 WL 6289953, at *4 (S.D.N.Y. Sept. 27, 2023) (citing 15 U.S.C. § 77t(d)(2); 15 U.S.C. § 78u(d)(3)(B)). A court may impose a first-tier penalty for any violation of the Exchange or Securities Acts; a second-tier penalty if the violation “involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement”; and a third-tier penalty if, in addition to meeting the second-tier requirements, the “violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.” Id. (citations omitted). Because “[t]he term ‘violation’ is not defined by the statutory scheme,” courts have discretion to determine the unit of violation for the purposes of imposing civil penalties under the tier method. SEC v. Fowler, 6 F.4th 255, 264 (2d Cir. 2021); see id. at 265. Although gross pecuniary gain or “the tier determines the maximum penalty, . . . the actual amount of the penalty [is] left up to the discretion of the district court.” SEC v. Kern, 425 F.3d 143, 153 (2d Cir. 2005). In determining the appropriate penalty, courts may consider factors including: (1) the egregiousness of the defendant’s conduct; (2) the degree of the defendant’s scienter; (3) whether the defendant’s conduct created substantial losses or the risk of substantial losses to other persons; (4) whether the defendant’s conduct was isolated or recurrent; and (5) whether the penalty should be reduced due to the defendant’s demonstrated current and future financial condition. SEC v. Rajaratnam, 918 F.3d 36, 44 (2d Cir. 2019) (citation omitted); see also id. at 45 (noting that the list is not exhaustive); cf. Fowler, 6 F.4th at 266 (noting that the Circuit has not held that “the civil penalty for a securities fraud offense needs to be proportional to the disgorgement amount”). The Court may also consider “the extent to which other aspects of the relief and/or judgment issued in this matter will have the desired punitive effect.” SEC v. Universal Exp., Inc., 646 F. Supp. 2d 552, 568 (S.D.N.Y. 2009), aff’d, 438 F. App’x 23 (2d Cir. 2011). B. Application B. Application The SEC asks the Court to impose a penalty of $876,308,712, equal to the net profits it calculates for the Institutional Sales. SEC Mem. at 23. Ripple argues that a penalty of no more than $10 million, or “about [redacted] of Ripple’s actual gross revenues . . . from pre-Complaint Institutional Sales,” is appropriate. Ripple Opp. at 30 (citation omitted). The Court finds that a first-tier penalty is appropriate in this case, which involves no allegations of “fraud, deceit, [or] manipulation,” and no conclusively established “deliberate or reckless disregard of a regulatory requirement.” 15 U.S.C. § 77t(d)(2)(B); see supra Part I.B. Although Ripple’s gross pecuniary gain from the Institutional Sales sets a higher statutory ceiling, the Court finds that the tier-analysis method more closely tailors the penalty to the scope of Ripple’s actual wrongdoing than the parties’ (virtually) all-or-nothing requests. As to the amount of the penalty, the Court has discussed the second and fourth Rajaratnam factors, which overlap with the factors relevant to injunctive relief, above. See supra Part I.B. On the first factor, the egregiousness of Ripple’s conduct, there is no question that the recurrent, highly lucrative violation of Section 5 is a serious offense. However, this case does not involve allegations of fraud, misappropriation, or other more culpable conduct. Relatedly, as to the third factor, the SEC has not established that Ripple’s failure to register the Institutional Sales caused substantial losses (or the risk thereof) to investors. See supra Part II.B. And, on the fifth factor, Ripple does not contest that its current financial condition does not merit a reduced penalty. See Ripple Opp. at 28–29. Beyond the Rajaratnam factors, the Court considers that Ripple will not be ordered to pay disgorgement, which dictates in favor of a larger penalty to accomplish “the desired punitive effect.” Universal Exp., Inc., 646 F. Supp. 2d at 568. The Court finds, therefore, that a perviolation penalty at the first-tier maximum is appropriate. The final step is to define and count the “violations” involved in the Institutional Sales. Because Section 5’s registration requirement is “transaction-specific,” it follows that each unregistered transaction constitutes a separate violation of the statute. Cavanagh, 155 F.3d at 133; see also SEC v. Colonial Inv. Mgmt. LLC, 381 F. App’x 27, 29 (2d Cir. 2010) (summary order) (affirming per-transaction penalties calculation). The SEC suggests that each of Ripple’s “1,700 relevant contracts” constitutes a separate violation. SEC Mem. at 23–24 n.8. Ripple responds that the “1,700 relevant contracts” figure includes “hundreds of contracts related to Programmatic Sales and Other Distributions,” which should be excluded. Ripple Opp. at 19 n.20. But, Ripple does not offer its own tabulation of the relevant contracts, and the SEC does not respond to Ripple’s contention in its reply brief. Based on the Court’s independent analysis of Ripple’s expert report summarizing the relevant contracts, see Schwarz Rep., ECF No. 582-7, the Court finds that 1,278 transactions violated Section 5, resulting in a civil penalty of $125,035,150. [10] Accordingly, the SEC’s request for a civil monetary penalty is GRANTED in part, and the Court will impose a penalty of $125,035,150. Continue Reading Here. Continue Reading Here . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com [10]  The Court arrived at this figure by first tabulating the 1,278 “Sales Contracts” listed in Exhibit C of the expert’s report, which excluded “Programmatic Contracts,” “Service Contracts,” and “Other Contracts.” Schwarz Rep. at 80–124; see id. ¶¶ 18–55. The Court then determined the applicable penalty for each contract based on its date. See 17 C.F.R. § 201.1001, Tbl. I; Adjustments to Civ. Monetary Penalty Amounts, Release No. 6521, 2024 WL 111023 (Jan. 5, 2024) (“Release No. 6521”). For contracts entered into on or after November 2, 2015, the penalty is currently $115,231 per contract. Release No. 6521. For contracts entered into between March 6, 2013 and November 2, 2015, the penalty is $80,000 per contract. 17 C.F.R. § 201.1001, Tbl. I. And, for contracts entered into between March 4, 2009 and March 5, 2013, the penalty is $75,000 per contract. Id. For the four undated contracts, the Court applied the current inflation-adjusted penalty amount. Finally, the Court totaled the per-contract penalties to arrive at a civil penalty of $125,035,150. This sum is concededly an estimate of the maximum first-tier penalty; it is possible that the contracts listed in Exhibit C are either an incomplete or overinclusive list of Ripple’s Institutional Sales during the relevant period. Because neither party provided a more specific calculation, however, the Court believes that its estimate is an adequate approximation.

SEC Hands Ripple a $125M Reality Check

SEC হ্যান্ডস রিপল $125M রিয়েলিটি চেক পায়

SEC übergibt Ripple einen Realitätscheck über 125 Millionen Dollar

La SEC le da a Ripple una dosis de realidad de 125 millones de dólares

La SEC remet à Ripple un chèque de 125 millions de dollars

एसईसी ने रिपल को 125 मिलियन डॉलर का वास्तविकता परीक्षण दिया

SECがリップル社に1億2500万ドルの現実を突きつける

SEC Hands Ripple이 1억 2,500만 달러의 현실 확인을 받다

SEC Hands Ripple recebe uma verificação da realidade de US$ 125 milhões

SEC вручает Ripple проверку на реальность на сумму 125 млн долларов

SEC, Ripple'a 125 Milyon Dolarlık Gerçeklik Kontrolü Sağladı

SEC trao Ripple khoản tiền kiểm tra thực tế trị giá 125 triệu đô la

SEC 向 Ripple 发出 1.25 亿美元现实检查

SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 3 of 5. II. Disgorgement A. Legal Standard In addition to injunctive relief, a district court may also order disgorgement, which “serves to remedy securities law violations by depriving violators of the fruits of their illegal conduct.” SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 2014). Disgorgement is an equitable remedy, permissible only where it “does not exceed a wrongdoer’s net profits and is awarded for victims.” Liu v. SEC, 591 U.S. 71, 75 (2020). [6] Following Liu, the Second Circuit clarified the meaning of “victims” in SEC v. Govil, 86 F.4th 89 (2d Cir. 2023). There, the defendant caused his company “to engage in three fraudulent securities offerings,” representing to investors that the company “would use the proceeds from the transactions to satisfy outstanding debts and for general corporate purposes.” Id. at 93. “Instead, he diverted over $7.3 million of the offering proceeds to his own private accounts.” Id. The district court determined that disgorgement was warranted, reasoning that the defrauded investors were victims of the defendant’s conduct because they were lied to, even if they “may not have been financially harmed” as a result of the lie. Id. at 97. The Second Circuit reversed, holding that “a ‘victim’ for purposes of § 78u(d)(5) is one who suffers pecuniary harm from the securities fraud.” Id. at 102. The Circuit explained that an equitable remedy is meant to “restore[] the status quo”—in the context of disgorgement, by “returning the funds to victims.” Id. at 103 (quoting Liu, 591 U.S. at 80, 88) (cleaned up). Allowing “defrauded investors who suffered no pecuniary harm . . . to receive the proceeds of disgorgement,” the Circuit reasoned, would “confer[] a windfall on those who received the benefit of the bargain.” Id. at 103. Therefore, for purposes of ordering disgorgement, it is not enough that investors are lied to and “thus denied the right to make an informed decision when considering whether to make [an] investment.” Id. at 105. “[O]ffending that right” does not result in pecuniary harm.” Id. (citing Ciminelli v. United States, 598 U.S. 306, 315 (2023)) B. Application The parties dispute whether the Circuit’s decision in Govil bars disgorgement of Ripple’s profits from Institutional Sales. The Court finds that it does. The SEC contends that ordering disgorgement would not run afoul of Govil because Ripple’s violation of Section 5, via “entirely tainted transactions, caused pecuniary harm to investors.” SEC Mem. at 17. Specifically, the SEC argues that Ripple sold XRP to certain Institutional Buyers at “deep undisclosed discounts” as high as [redacted]. Id. at 18. Because Ripple failed to publicly register these discounted Institutional Sales, the SEC argues, “non-favored investors” were deprived of “the information they needed to determine whether Ripple was treating them worse and whether they could purchase [] XRP at a better price.” Id. The SEC estimates that if Ripple had disclosed its “significant discounts to other investors,” non-favored investors could have saved “potentially more than [redacted].” Id. at 19–20. The SEC further contends that the discounted sales caused pecuniary harm by “put[ting] downward pressure on the market price of XRP,” as investors who bought discounted XRP could sell for below-market prices and still profit. Id. at 20. Govil forecloses this argument. The SEC contends that Ripple “appears to have not uniformly disclosed the disparate prices and discounts offered” to Institutional Buyers. Id. at 18. The Circuit held, however, that “the right to make an informed decision when considering whether to make [an] investment” is not a property interest that can be vindicated through disgorgement. Govil, 86 F.4th at 105. As Ripple argues, many of the Govil investors would have likely been dissuaded from investing—or, at least, valued the shares at a lower price—had they known that the company’s founder intended to pocket the funds for his own use. See Ripple Opp. at 20. Yet the Circuit found that the pecuniary-harm requirement was not satisfied, as the district court acknowledged that “the investors received the return on the investment contemplated at the outset.” Govil, 86 F.4th at 105. Here, the SEC offers only speculative evidence that the Institutional Buyers did not “receive[] the return on the investment contemplated.” Id; see also id. at 104 n.16 (noting that “whether the investors actually suffered pecuniary harm would depend on the type of securities held, the terms of those securities, and when those securities were sold,” a level of detail missing from the record in Govil). The SEC’s [redacted] estimate of lost potential savings comes from an analysis conducted by SEC accountant Andrea Fox, who calculated “how much less Institutional Buyers in the aggregate would have paid for XRP if the best price offered to Institutional Buyers had been obtained by every Institutional Buyer.”[7] Fox Decl. ¶ 34, ECF No. 946. But, the SEC does not (and cannot) establish that Ripple would have, in fact, offered any additional discounts to investors had it complied with Section 5’s registration requirements. It is possible that some investors “could have demanded and potentially paid lower prices.” SEC Mem. at 18. Yet, it is at least equally possible that Ripple would have opted to offer fewer and smaller discounts overall. Cf. id. at 17 (explaining that “unregistered shares . . . are [generally] worth less” than their registered counterparts). The fact that some investors “may have been able to negotiate better deals if discounts [offered to others] were disclosed as required,” SEC Mem. at 19, does not establish that they suffered pecuniary harm by paying the sticker price. Cf. Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 342 (2005) (noting that in fraud-on-the-market cases, “an inflated purchase price will not itself constitute or proximately cause the relevant economic loss”).[8] Relying on SEC v. Ahmed, 72 F.4th 379 (2d Cir. 2023), the SEC also argues that disgorgement is appropriate because Ripple’s failure to disclose the discounts “tainted” each of the Institutional Sales. SEC Reply at 9, ECF No. 961. In Ahmed, the investment-manager defendant “stole over $65 million” from his employer and ten portfolio companies, including by negotiating transactions in which he had an undisclosed conflict of interest. 72 F.4th at 390. The Second Circuit found that the conflicted transactions were “entirely tainted,” holding that the defendant was obligated to disgorge the full amount he received. Id. at 397. But the Circuit’s inquiry into the permissible amount of disgorgement sheds little light on the threshold question here: whether the SEC has shown pecuniary harm at all such that disgorgement is warranted. In Ahmed, which involved the defendant’s knowing misappropriation of millions of dollars from his employer, there was no question that the employer had suffered an economic loss. See id. at 390–91. Here, pecuniary harm is far less apparent. Because binding Circuit precedent precludes disgorgement based on the facts of this case, the SEC’s request for disgorgement and prejudgment interest[9] is DENIED. Continue Reading Here. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings.
This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. [6] Six months after Liu, “Congress enacted § 78u(d)(7), which “gives the SEC the power to ‘seek’ and federal courts the power to ‘order’ the remedy of ‘disgorgement.’” SEC v. Govil, 86 F.4th 89, 99–100 (2d Cir. 2023) (discussing 15 U.S.C. § 78u(d)(7)). The Second Circuit has interpreted § 78u(d)(7) to limit disgorgement to the bounds established by the Supreme Court’s decision in Liu. Id. at 102 (citing SEC v. Ahmed, 72 F.4th 379, 396 (2d Cir. 2023)). But see SEC v. Hallam, 42 F.4th 316, 338 (5th Cir. 2022) (holding that “Section 78u(d) authorizes disgorgement in a legal—not equitable—sense.”). [7] Ripple separately moves to strike Fox’s declaration and supporting exhibits, arguing that they were filed late. ECF No. 951; see ECF Nos. 959, 960. In light of the Court’s finding that no disgorgement is permitted, the motion is DENIED as moot. [8] The SEC’s sole authority to the contrary, SEC v. iFresh, Inc., No. 22 Civ. 3200, 2024 WL 416709 (E.D.N.Y. Feb. 5, 2024), is an unpublished district court opinion that found (without analysis) the fact that stock prices were artificially inflated sufficient to establish pecuniary harm. Id. at *3; see SEC Reply at 9, ECF No. 961. That case— involving a consent order—required the district court to accept the SEC’s allegations of stock price inflation as true. iFresh, Inc., 2024 WL 416709 at *3. [9] “[T]he amount on which a violator must pay prejudgment interest usually tracks the amount that the party is ordered to disgorge.” Contorinis, 743 F.3d at 308. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series. You can jump to any part of this filing here. This part is 3 of 5. SEC v. Ripple Labs, Inc., Court Filing, retrieved on August 05, 2024, is part of HackerNoon’s Legal PDF Series . You can jump to any part of this filing here . This part is 3 of 5. HackerNoon’s Legal PDF Series here II. Disgorgement A. Legal Standard A. Legal Standard In addition to injunctive relief, a district court may also order disgorgement, which “serves to remedy securities law violations by depriving violators of the fruits of their illegal conduct.” SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 2014). Disgorgement is an equitable remedy, permissible only where it “does not exceed a wrongdoer’s net profits and is awarded for victims.” Liu v. SEC, 591 U.S. 71, 75 (2020). [6] Following Liu, the Second Circuit clarified the meaning of “victims” in SEC v. Govil, 86 F.4th 89 (2d Cir. 2023). There, the defendant caused his company “to engage in three fraudulent securities offerings,” representing to investors that the company “would use the proceeds from the transactions to satisfy outstanding debts and for general corporate purposes.” Id. at 93. “Instead, he diverted over $7.3 million of the offering proceeds to his own private accounts.” Id. The district court determined that disgorgement was warranted, reasoning that the defrauded investors were victims of the defendant’s conduct because they were lied to, even if they “may not have been financially harmed” as a result of the lie. Id. at 97. The Second Circuit reversed, holding that “a ‘victim’ for purposes of § 78u(d)(5) is one who suffers pecuniary harm from the securities fraud.” Id. at 102. The Circuit explained that an equitable remedy is meant to “restore[] the status quo”—in the context of disgorgement, by “returning the funds to victims.” Id. at 103 (quoting Liu, 591 U.S. at 80, 88) (cleaned up). Allowing “defrauded investors who suffered no pecuniary harm . . . to receive the proceeds of disgorgement,” the Circuit reasoned, would “confer[] a windfall on those who received the benefit of the bargain.” Id. at 103. Therefore, for purposes of ordering disgorgement, it is not enough that investors are lied to and “thus denied the right to make an informed decision when considering whether to make [an] investment.” Id. at 105. “[O]ffending that right” does not result in pecuniary harm.” Id. (citing Ciminelli v. United States, 598 U.S. 306, 315 (2023)) B. Application B. Application The parties dispute whether the Circuit’s decision in Govil bars disgorgement of Ripple’s profits from Institutional Sales. The Court finds that it does. The SEC contends that ordering disgorgement would not run afoul of Govil because Ripple’s violation of Section 5, via “entirely tainted transactions, caused pecuniary harm to investors.” SEC Mem. at 17. Specifically, the SEC argues that Ripple sold XRP to certain Institutional Buyers at “deep undisclosed discounts” as high as [redacted]. Id. at 18. Because Ripple failed to publicly register these discounted Institutional Sales, the SEC argues, “non-favored investors” were deprived of “the information they needed to determine whether Ripple was treating them worse and whether they could purchase [] XRP at a better price.” Id. The SEC estimates that if Ripple had disclosed its “significant discounts to other investors,” non-favored investors could have saved “potentially more than [redacted].” Id. at 19–20. The SEC further contends that the discounted sales caused pecuniary harm by “put[ting] downward pressure on the market price of XRP,” as investors who bought discounted XRP could sell for below-market prices and still profit. Id. at 20. Govil forecloses this argument. The SEC contends that Ripple “appears to have not uniformly disclosed the disparate prices and discounts offered” to Institutional Buyers. Id. at 18. The Circuit held, however, that “the right to make an informed decision when considering whether to make [an] investment” is not a property interest that can be vindicated through disgorgement. Govil, 86 F.4th at 105. As Ripple argues, many of the Govil investors would have likely been dissuaded from investing—or, at least, valued the shares at a lower price—had they known that the company’s founder intended to pocket the funds for his own use. See Ripple Opp. at 20. Yet the Circuit found that the pecuniary-harm requirement was not satisfied, as the district court acknowledged that “the investors received the return on the investment contemplated at the outset.” Govil, 86 F.4th at 105. Here, the SEC offers only speculative evidence that the Institutional Buyers did not “receive[] the return on the investment contemplated.” Id; see also id. at 104 n.16 (noting that “whether the investors actually suffered pecuniary harm would depend on the type of securities held, the terms of those securities, and when those securities were sold,” a level of detail missing from the record in Govil). The SEC’s [redacted] estimate of lost potential savings comes from an analysis conducted by SEC accountant Andrea Fox, who calculated “how much less Institutional Buyers in the aggregate would have paid for XRP if the best price offered to Institutional Buyers had been obtained by every Institutional Buyer.”[7] Fox Decl. ¶ 34, ECF No. 946. But, the SEC does not (and cannot) establish that Ripple would have, in fact, offered any additional discounts to investors had it complied with Section 5’s registration requirements. It is possible that some investors “could have demanded and potentially paid lower prices.” SEC Mem. at 18. Yet, it is at least equally possible that Ripple would have opted to offer fewer and smaller discounts overall. Cf. id. at 17 (explaining that “unregistered shares . . . are [generally] worth less” than their registered counterparts). The fact that some investors “may have been able to negotiate better deals if discounts [offered to others] were disclosed as required,” SEC Mem. at 19, does not establish that they suffered pecuniary harm by paying the sticker price. Cf. Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 342 (2005) (noting that in fraud-on-the-market cases, “an inflated purchase price will not itself constitute or proximately cause the relevant economic loss”).[8] Relying on SEC v. Ahmed, 72 F.4th 379 (2d Cir. 2023), the SEC also argues that disgorgement is appropriate because Ripple’s failure to disclose the discounts “tainted” each of the Institutional Sales. SEC Reply at 9, ECF No. 961. In Ahmed, the investment-manager defendant “stole over $65 million” from his employer and ten portfolio companies, including by negotiating transactions in which he had an undisclosed conflict of interest. 72 F.4th at 390. The Second Circuit found that the conflicted transactions were “entirely tainted,” holding that the defendant was obligated to disgorge the full amount he received. Id. at 397. But the Circuit’s inquiry into the permissible amount of disgorgement sheds little light on the threshold question here: whether the SEC has shown pecuniary harm at all such that disgorgement is warranted. In Ahmed, which involved the defendant’s knowing misappropriation of millions of dollars from his employer, there was no question that the employer had suffered an economic loss. See id. at 390–91. Here, pecuniary harm is far less apparent. Because binding Circuit precedent precludes disgorgement based on the facts of this case, the SEC’s request for disgorgement and prejudgment interest[9] is DENIED. Continue Reading Here. Continue Reading Here . Here About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on August 07, 2024, dropbox.com is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. dropbox.com [6] Six months after Liu, “Congress enacted § 78u(d)(7), which “gives the SEC the power to ‘seek’ and federal courts the power to ‘order’ the remedy of ‘disgorgement.’” SEC v. Govil, 86 F.4th 89, 99–100 (2d Cir. 2023) (discussing 15 U.S.C. § 78u(d)(7)). The Second Circuit has interpreted § 78u(d)(7) to limit disgorgement to the bounds established by the Supreme Court’s decision in Liu. Id. at 102 (citing SEC v. Ahmed, 72 F.4th 379, 396 (2d Cir. 2023)). But see SEC v. Hallam, 42 F.4th 316, 338 (5th Cir. 2022) (holding that “Section 78u(d) authorizes disgorgement in a legal—not equitable—sense.”). [7] Ripple separately moves to strike Fox’s declaration and supporting exhibits, arguing that they were filed late. ECF No. 951; see ECF Nos. 959, 960. In light of the Court’s finding that no disgorgement is permitted, the motion is DENIED as moot. [8] The SEC’s sole authority to the contrary, SEC v. iFresh, Inc., No. 22 Civ. 3200, 2024 WL 416709 (E.D.N.Y. Feb. 5, 2024), is an unpublished district court opinion that found (without analysis) the fact that stock prices were artificially inflated sufficient to establish pecuniary harm. Id. at *3; see SEC Reply at 9, ECF No. 961. That case— involving a consent order—required the district court to accept the SEC’s allegations of stock price inflation as true. iFresh, Inc., 2024 WL 416709 at *3. [9] “[T]he amount on which a violator must pay prejudgment interest usually tracks the amount that the party is ordered to disgorge.” Contorinis, 743 F.3d at 308.

Court Denies SEC's Request for $1 Billion in Disgorgement from Ripple

Court Grants SEC’s Injunction Against Ripple

Authors:
(1) Matthew Sprintson
(2) Edward Oughton Table of Links Abstract and Introduction 2. Literature Review 2.1 Reviewing Broadband Infrastructure’s Impact on the Economy 2.2 Previous Research into IO Modeling of Broadband Investment 2.3 Context of the Bipartisan Infrastructure Act through Previous Research 3. Methods and 3.1 Leontief Input-Output (IO) Modeling 3.2 Ghosh Supply-Side Assessment Methods for Infrastructure 3.3 Data and Application 4. Results and 4.1 To what extent does the Bipartisan Infrastructure Law allocate funding to unconnected communities in need? 4.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? 4.3 How are the supply chain linkages affected by allocations from the Bipartisan Infrastructure Law? 5. Discussion 5.1 To what extent does the Bipartisan Infrastructure Law allocate funding to unconnected communities in need? 5.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? 5.3 How are supply chain linkages affected by allocations from the Bipartisan Infrastructure Law?" Conclusion Acknowledgements and References 5.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? We find that the US $59.7 billion investment from the Biden administration’s Bipartisan Infrastructure Law could lead to a total macroeconomic impact of up to $146 billion, given an indirect impact of $86.3 billion (59.1%). This is based on the direct investment being spent on building out (predominantly) new fixed broadband infrastructure for cost items such as civil engineering, active equipment deployment, and the associated labor necessary to connect households to high-speed broadband Internet. Whereas, the indirect investment represents both industries utilizing broadband to grow their customer base and the multiplier effects of employed labor undertaking secondary spending in the economy. Our research estimates that overall, the BIL investment may reach a return multiplier as high as 2.45, which is slightly larger than other infrastructure investment estimates in the literature, such as by Dimitriou (2.2) (Dimitriou et al., 2015). Therefore, this spending could boost GDP growth, while also potentially providing long-term opportunities for (particularly rural) households at a time when our reliance on high-speed broadband connectivity is growing. Thus, there is a strong need to overcome market failure in areas of current poor broadband service. Proponents argue that the lack of infrastructure necessitates the passage of the BIL, as the return on investment to national GDP outweighs the cost to the taxpayers. Additionally, as the estimated $146 billion in GDP trickles through the macroeconomy, there may be other economic benefits, ranging from productivity gains to increased entrepreneurship. The broadband programs within the Bipartisan Infrastructure Law are the largest federally-directed investment in broadband infrastructure to date. The program’s goals are similar to those of the Rural Electrification Act (REA) in the 1930s, established by Franklin D. Roosevelt as an investment associated with the New Deal (Record Group 221, 1934). At the time, many detractors argued that the program was too expensive. However, as evidence has shown, the investment laid the foundation for nearly a century of economic development, improving the quality of life of citizens and expanding business opportunities, especially for rural regions (Bouzarovski et al., 2023; Olanrele, 2020; Tierney, 2011). Similarly, many critics of the programs take issue with the significant government investment at a time when fiscal headroom is at a minimum. Recently, many congressional representatives have voiced their concerns about government spending, stating “...we have no money” and “there’s no money in the house” (Davis, 2023; Sforza, 2023). Concern has been growing about the current administration financing government spending through deficit spending, for example, with the US budget deficit effectively doubling in 2023, with the ongoing expansion of a range of federal programs, such as BEAD, ACP, and the TBCP (Gopinath, 2023; Rappeport & Tankersley, 2023). This paper is available on arxiv under CC0 1.0 DEED license. Authors: (1) Matthew Sprintson (2) Edward Oughton Authors: Authors: (1) Matthew Sprintson (2) Edward Oughton Table of Links Abstract and Introduction Abstract and Introduction 2. Literature Review 2.1 Reviewing Broadband Infrastructure’s Impact on the Economy 2.1 Reviewing Broadband Infrastructure’s Impact on the Economy 2.2 Previous Research into IO Modeling of Broadband Investment 2.2 Previous Research into IO Modeling of Broadband Investment 2.3 Context of the Bipartisan Infrastructure Act through Previous Research 2.3 Context of the Bipartisan Infrastructure Act through Previous Research 3. Methods and 3.1 Leontief Input-Output (IO) Modeling 3. Methods and 3.1 Leontief Input-Output (IO) Modeling 3.2 Ghosh Supply-Side Assessment Methods for Infrastructure 3.2 Ghosh Supply-Side Assessment Methods for Infrastructure 3.3 Data and Application 3.3 Data and Application 4. Results and 4.1 To what extent does the Bipartisan Infrastructure Law allocate funding to unconnected communities in need? 4. Results and 4.1 To what extent does the Bipartisan Infrastructure Law allocate funding to unconnected communities in need? 4.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? 4.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? 4.3 How are the supply chain linkages affected by allocations from the Bipartisan Infrastructure Law? 4.3 How are the supply chain linkages affected by allocations from the Bipartisan Infrastructure Law? 5. Discussion 5.1 To what extent does the Bipartisan Infrastructure Law allocate funding to unconnected communities in need? 5.1 To what extent does the Bipartisan Infrastructure Law allocate funding to unconnected communities in need? 5.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? 5.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? 5.3 How are supply chain linkages affected by allocations from the Bipartisan Infrastructure Law?" 5.3 How are supply chain linkages affected by allocations from the Bipartisan Infrastructure Law?" Conclusion Conclusion Acknowledgements and References Acknowledgements and References 5.2 What are the GDP impacts of the three funding programs within the Bipartisan Infrastructure Law? We find that the US $59.7 billion investment from the Biden administration’s Bipartisan Infrastructure Law could lead to a total macroeconomic impact of up to $146 billion, given an indirect impact of $86.3 billion (59.1%). This is based on the direct investment being spent on building out (predominantly) new fixed broadband infrastructure for cost items such as civil engineering, active equipment deployment, and the associated labor necessary to connect households to high-speed broadband Internet. Whereas, the indirect investment represents both industries utilizing broadband to grow their customer base and the multiplier effects of employed labor undertaking secondary spending in the economy. Our research estimates that overall, the BIL investment may reach a return multiplier as high as 2.45, which is slightly larger than other infrastructure investment estimates in the literature, such as by Dimitriou (2.2) (Dimitriou et al., 2015). Therefore, this spending could boost GDP growth, while also potentially providing long-term opportunities for (particularly rural) households at a time when our reliance on high-speed broadband connectivity is growing. Thus, there is a strong need to overcome market failure in areas of current poor broadband service. Proponents argue that the lack of infrastructure necessitates the passage of the BIL, as the return on investment to national GDP outweighs the cost to the taxpayers. Additionally, as the estimated $146 billion in GDP trickles through the macroeconomy, there may be other economic benefits, ranging from productivity gains to increased entrepreneurship. The broadband programs within the Bipartisan Infrastructure Law are the largest federally-directed investment in broadband infrastructure to date. The program’s goals are similar to those of the Rural Electrification Act (REA) in the 1930s, established by Franklin D. Roosevelt as an investment associated with the New Deal (Record Group 221, 1934). At the time, many detractors argued that the program was too expensive. However, as evidence has shown, the investment laid the foundation for nearly a century of economic development, improving the quality of life of citizens and expanding business opportunities, especially for rural regions (Bouzarovski et al., 2023; Olanrele, 2020; Tierney, 2011). Similarly, many critics of the programs take issue with the significant government investment at a time when fiscal headroom is at a minimum. Recently, many congressional representatives have voiced their concerns about government spending, stating “...we have no money” and “there’s no money in the house” (Davis, 2023; Sforza, 2023). Concern has been growing about the current administration financing government spending through deficit spending, for example, with the US budget deficit effectively doubling in 2023, with the ongoing expansion of a range of federal programs, such as BEAD, ACP, and the TBCP (Gopinath, 2023; Rappeport & Tankersley, 2023). This paper is available on arxiv under CC0 1.0 DEED license. This paper is available on arxiv under CC0 1.0 DEED license. available on arxiv

The Economic Ripple Effect of Broadband Investments

It’s been a while since we’ve seen some serious FUD on USDT. Recently, Ripple CEO Brad Garlinghouse said that the U.S. government was going after Tether, which issues the USDT stablecoin. He did not provide any specific thoughts on possible risks to the USDT stablecoin. At the same time, Brad Garlinghouse noted that USDT was important for the entire crypto ecosystem and the story was worth monitoring. In response, Tether noted that Ripple would soon launch its own stablecoin. According to Tether, Brad Garlinghouse was simply trying to put some pressure on the competitor's product. However, it is quite possible that Ripple CEO had some specific threats in mind when talking about USDT-related risks. According to recent reports, the U.S. was working on rules that would limit issuers without a banking license to a maximum stablecoin market cap of $10 billion. Such rules would prohibit U.S. entities from holding and transacting with offshore-issued stablecoins that do not have a U.S. banking license, such as USDT. In theory, the potential rules will provide banks with an opportunity to create their own stablecoins and compete with USDT. It’s no secret that U.S. regulators do not like the offshore Tether, although the company has boosted its compliance with U.S. rules, including sanctions. With a market cap exceeding $110 billion, USDT is the dominant force in the stablecoin market. The second biggest stablecoin, USDC, has a market cap of roughly $33 billion. Put simply, the market is choosing USDT over USDC. At this point, USDC is the go-to stablecoin for anyone who wants a U.S.-based stablecoin. Ironically, USDC suffered from its U.S. exposure back in March 2023, when the U.S. regional banks crisis dealt a serious blow to its capitalization. The data shows that there is no demand for another U.S.-focused stablecoin. PayPal, which aimed to leverage its huge user base, tried to promote its own stablecoin, PYUSD. The result is extremely disappointing since PYUSD failed to climb above the $400 million market cap level. It remains to be seen whether Ripple’s stablecoin will gain market success. It should be noted that USDT is used all over the world. For many users, its offshore nature is a feature, not a bug. It is not clear whether such users would like to deal with a potential stablecoin issued by a big U.S. bank. In addition, crypto markets are growing fast, which means that the potential total market cap for all existing stablecoins is growing as well. Thus, USDT may lose market share to a U.S. bank-issued stablecoin but still increase its market cap due to rising demand for stablecoins in the world. Bottom line: USDT is well positioned to profit from crypto market growth. Real market data shows that demand for U.S.-based stablecoins is weaker than for offshore-based stablecoins. The proposed U.S. rules could put some pressure on USDT market share but will not serve as the black swan event for crypto markets or USDT itself. It’s been a while since we’ve seen some serious FUD on USDT. Recently, Ripple CEO Brad Garlinghouse said that the U.S. government was going after Tether, which issues the USDT stablecoin. said said He did not provide any specific thoughts on possible risks to the USDT stablecoin. At the same time, Brad Garlinghouse noted that USDT was important for the entire crypto ecosystem and the story was worth monitoring. In response, Tether noted that Ripple would soon launch its own stablecoin. According to Tether, Brad Garlinghouse was simply trying to put some pressure on the competitor's product. However, it is quite possible that Ripple CEO had some specific threats in mind when talking about USDT-related risks. noted noted According to recent reports , the U.S. was working on rules that would limit issuers without a banking license to a maximum stablecoin market cap of $10 billion. Such rules would prohibit U.S. entities from holding and transacting with offshore-issued stablecoins that do not have a U.S. banking license, such as USDT. In theory, the potential rules will provide banks with an opportunity to create their own stablecoins and compete with USDT. reports reports It’s no secret that U.S. regulators do not like the offshore Tether, although the company has boosted its compliance with U.S. rules, including sanctions. With a market cap exceeding $110 billion, USDT is the dominant force in the stablecoin market. The second biggest stablecoin, USDC, has a market cap of roughly $33 billion. Put simply, the market is choosing USDT over USDC. At this point, USDC is the go-to stablecoin for anyone who wants a U.S.-based stablecoin. Ironically, USDC suffered from its U.S. exposure back in March 2023, when the U.S. regional banks crisis dealt a serious blow to its capitalization. The data shows that there is no demand for another U.S.-focused stablecoin. PayPal, which aimed to leverage its huge user base, tried to promote its own stablecoin, PYUSD. The result is extremely disappointing since PYUSD failed to climb above the $400 million market cap level. It remains to be seen whether Ripple’s stablecoin will gain market success. It should be noted that USDT is used all over the world. For many users, its offshore nature is a feature, not a bug. It is not clear whether such users would like to deal with a potential stablecoin issued by a big U.S. bank. In addition, crypto markets are growing fast, which means that the potential total market cap for all existing stablecoins is growing as well. Thus, USDT may lose market share to a U.S. bank-issued stablecoin but still increase its market cap due to rising demand for stablecoins in the world. Bottom line: USDT is well positioned to profit from crypto market growth. Real market data shows that demand for U.S.-based stablecoins is weaker than for offshore-based stablecoins. The proposed U.S. rules could put some pressure on USDT market share but will not serve as the black swan event for crypto markets or USDT itself.

Ripple CEO Talks About the U.S. Government Going After Tether: Is It Just Another FUD?

A few days ago, Ripple (the company that issues XRP) announced its plans for a new USD-backed stablecoin. In an interview, Ripple’s CEO Brad Garlinghouse said that the stablecoin would be launched this year. It will be backed by dollar deposits, short-term government bonds and cash equivalents. The new stablecoin will be launched on XRP (no surprise) and ETH blockchains (no surprise; Ripple chose the “industry standard” and ignored direct competitors). Ripple will later announce which exchanges will list the new stablecoin. The stablecoin market is rapidly growing amid rising interest for crypto markets. Tether (USDT) remains the main issuer of stablecoins with a market cap approaching $107 billion. Circle’s USDC has started to recover from the blow dealt by the U.S. regional banks crisis in early 2023. Its market cap has already settled above the $32 billion level. Other competitors are far behind USDT and USDC. Interestingly, PayPal’s stablecoin, which was launched back in August 2023, failed to gain traction despite the company’s large user base. Currently, PYUSD market cap does not exceed $200 million. The key reason for the failure is the lack of a clear use case and strategy. It looks that PayPal’s user base was the only idea behind the creation of the company’s stablecoin. Ripple’s stablecoin has better potential as the company understands crypto markets. However, the stablecoin must capture significant market share to be viable in the long term. It should be noted that the new stablecoin would not be a direct competitor to USDT as it will be under strict control of U.S. regulators. Those who want to see that stablecoin’s reserves are fully inside the U.S. financial circuit choose the world’s second largest stablecoin, USDC. XRP must prove that its product is better than the established USDC. Most likely, we’ll see more stablecoins launched this year. This trend is driven by two catalysts — high U.S. government bond yields (that’s how issuers make profits) and rising interest for crypto. However, there’s no threat to the dominance of USDT, which remains a unique product. A few days ago, Ripple (the company that issues XRP) announced its plans for a new USD-backed stablecoin. A few days ago, Ripple (the company that issues XRP) announced its plans for a new USD-backed stablecoin. announced In an interview, Ripple’s CEO Brad Garlinghouse said that the stablecoin would be launched this year. It will be backed by dollar deposits, short-term government bonds and cash equivalents. The new stablecoin will be launched on XRP (no surprise) and ETH blockchains (no surprise; Ripple chose the “industry standard” and ignored direct competitors). Ripple will later announce which exchanges will list the new stablecoin. The stablecoin market is rapidly growing amid rising interest for crypto markets. Tether (USDT) remains the main issuer of stablecoins with a market cap approaching $107 billion. Circle’s USDC has started to recover from the blow dealt by the U.S. regional banks crisis in early 2023. Its market cap has already settled above the $32 billion level. Other competitors are far behind USDT and USDC. Interestingly, PayPal’s stablecoin, which was launched back in August 2023, failed to gain traction despite the company’s large user base. Currently, PYUSD market cap does not exceed $200 million. launched launched The key reason for the failure is the lack of a clear use case and strategy. It looks that PayPal’s user base was the only idea behind the creation of the company’s stablecoin. Ripple’s stablecoin has better potential as the company understands crypto markets. However, the stablecoin must capture significant market share to be viable in the long term. It should be noted that the new stablecoin would not be a direct competitor to USDT as it will be under strict control of U.S. regulators. Those who want to see that stablecoin’s reserves are fully inside the U.S. financial circuit choose the world’s second largest stablecoin, USDC. XRP must prove that its product is better than the established USDC. Most likely, we’ll see more stablecoins launched this year. This trend is driven by two catalysts — high U.S. government bond yields (that’s how issuers make profits) and rising interest for crypto. However, there’s no threat to the dominance of USDT, which remains a unique product.

Ripple’s Stablecoin: a Competitor to USDT?

SINGAPORE, Singapore, December 19th, 2023/FinanceWire/--With 2023 coming to an end, leading global broker FBS looks back at the significant economic events and delves into the perspective of the financial landscape in 2024. FBS financial market analysts point out that next year, financial markets will stand at the cusp of transformation under the influence of the US economy, global and local military conflicts, and the sprawl of AI. As experts further stress, the cautious stance of the Federal Reserve on monetary policy and the rising cycle in 2023 weakened the US dollar, impacting major currency pairs like EURUSD. The FOMC press conference speech by Jerome Powell on the possible easing of US monetary policy in 2024 pushed EURUSD to the resistance at 1.1000. FBS Global broker anticipates that economic growth will slow down to 2-3% due to monetary tightening in 2023 and geopolitical tensions impacting international trade. In this context, traders should consider volatile events and focus on risk management to mitigate stop-outs and losses. FBS analysts describe 2023 as a time when traders faced multiple liquidation risks amid media-covered geopolitical and economic events. Market uncertainty was heated by the global military conflicts that provoked gaps in XAUUSD and oil prices. By the end of the year, oil prices went down due to the anticipated deterioration of economic conditions in 2024, and gold prices experienced an upswing due to USD weakness, emphasizing the need for prudence during unpredictable news periods. The turbulent trend will likely continue in 2024, with oil prices fluctuating between $70 and $100 per barrel and gold rallying to $2,300 as investors will be awaiting the next inflation spike. 2023 was marked by optimism for the cryptocurrency market, FBS financial market analysts point out. BTCUSD demonstrated remarkable strength, gaining over 120%. Cooling US inflation, anticipation of Fed rate cuts, and the collapse of tech-focused banks early in the year contributed to Bitcoin's resilience. Speaking about the potential dynamic in 2024, FBS analysts underscore the high incidence of a bearish trend in the first half of the year. Over the past weeks, Bitcoin has been going up to the resistance area of $47,000. In this context, FBS experts anticipate the recurrence of the 2019 events, when the Federal Reserve cut the key rate due to a weakening economy, which sent risky assets, such as Bitcoin, down – this time, the asset may even fall to the supports between $36,000 and $25,000. Although the second half of the year is expected to bring more positivity to Bitcion’s trajectory, the crypto movement will hinge on regulatory changes, institutional adoption pace, and advances in blockchain technology. The rise of artificial intelligence (AI) was another primary driver of 2023 that significantly influenced the stocks of AI-related companies. This way, NVIDIA's stocks experienced a remarkable increase by 165%. However, FBS analysts highlight their overbought nature and advise traders to monitor performance – if the per-share price exceeds the $500 level, it will likely go up to $700. Emerging markets are expected to play a more significant role in the global economy in 2024, where Asian markets will be especially attractive. According to FBS analysts, traders can consider India, some Southeast Asian countries, and Brazil when planning their trades. These geographies are poised for significant growth, offering new investment opportunities and influencing global trade dynamics. In conclusion, FBS's outlook on 2024 underscores the need for vigilance and strategic planning to navigate uncertainties and opportunities in trading. Careful consideration of the ripple effects of 2023 and emerging events will be critical in making informed decisions. For more information about FBS’s services, visit www.fbs.com. Disclaimer: This material does not constitute a call to trade, trading advice or recommendation and is intended for informational purposes only. Contact FBS Press Office press@fbs.com This story was distributed as a release by Chainwire under HackerNoon’s Business Blogging Program. Learn more about the program . here

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