A crypto-skeptical commissioner at the US Securities and Exchange Commission has blasted her agency over its settlement letter that could finally end the Ripple legal saga.
The SEC and Ripple filed a joint settlement letter in a New York court asking for the August 2024 injunction against Ripple to be dissolved and $75 million of the $125 million in civil penalties held in escrow to be returned to the crypto firm, according to a May 8 statement from the SEC.
SEC Commissioner Caroline Crenshaw blasted the pending deal in a May 8 statement, saying it would damage the regulators’ ability to keep crypto firms in line and undermine the court’s ruling.
“This settlement, alongside the programmatic disassembly of the SEC’s crypto enforcement program, does a tremendous disservice to the investing public and undermines the court’s role in interpreting our securities laws,” she said.
“In the meantime, the settlement joins a line of dismissals that collectively erode the credibility of our lawyers in court who are being asked to take legal positions today contrary to the ones taken just months ago.”
At the same time, Crenshaw argues that if Judge Torres accepts the settlement, it would erase “the investor protections we already won” and leave a “regulatory vacuum,” until the crypto task force hammers out a regulatory framework.
“The settlement is not in the best interests of the investors and markets that our agency is tasked with serving and protecting. It creates more questions than answers.”
In August last year, a Judge ordered Ripple to pay $125 million in penalties after ruling the firm’s XRP (XRP) token was covered by securities laws when sold to institutional investors.
What’s next for the Ripple case? It’s not over yet
While the SEC and Ripple have agreed to a settlement, it’s still not a done deal, according to ex-federal prosecutor James Filan, because there are several steps before the long-running legal saga can conclude.
For a start, Judge Torres needs to provide an indicative ruling if she agrees to the settlement letter, Filan said in a May 8 analysis on X.
If Torres provides an indicative ruling, the SEC and Ripple will ask the Second Circuit Court of Appeals for a limited remand back to Judge Torres, which, if granted, will result in another motion being filed for the agreed settlement, according to Filan.
“After the injunction is dissolved and the funds distributed, the SEC and Ripple will ask the Court of Appeals to dismiss the SEC’s appeal and Ripple’s cross-appeal. Then it will be over,” he said.
The SEC initially launched legal action against Ripple Labs in December 2020, accusing the firm of illegally selling its token as an unregistered security.
Federal Reserve Governor Christopher Waller urged policymakers and bankers to stop fearing DeFi and stablecoins, saying they will drive the next wave of innovation in the US payments system.
Two Labour-run councils are considering legal action to stop the use of hotels to house migrants in their areas after Epping council won a temporary injunction.
The leaders of Wirral and Tamworth councils both say they are considering their legal options in the wake of the Epping case, citing similar concerns about the impact of the hotels on their local communities.
Epping Forest District Council won an interim High Court injunction on Tuesday to stop migrants being housed at The Bell Hotel, after arguing its owners did not have planning permission to do so.
Paula Basnett, the Labour leader of Wirral council, said: “We are actively considering all options available to us to ensure that any use of hotels or other premises in Wirral is lawful and does not ride roughshod over planning regulations or the wishes of our communities.”
She added: “If necessary, we will not hesitate to challenge such decisions in order to protect both residents and those seeking refuge.”
Carol Dean, the Labour leader of Tamworth Borough Council, said she understands the “strong feelings” of residents about the use of a local hotel to house asylum seekers.
She pointed out that under the Labour government, the use of hotels has halved from 402 to 210, with the aim of stopping the use of any hotels by 2029.
But in light of the Epping case, she said “we are closely monitoring developments and reviewing our legal position”.
Image: Epping has been the focal point of protests against migrant hotels in recent weeks. Pic: Reuters
Badenoch backs more council rebellions
Other Tory councils are also being encouraged to follow Epping’s lead by party leader Kemi Badenoch.
She has sent a letter to all the councils they control, pledging her support for them to fight migrant hotels.
She wrote: “The Epping hotel injunction is a victory for local people led by a good Conservative council working hard for their community. This is the difference Conservatives in local government deliver. Real plans. Real action.”
Conservative-run Broxbourne Council has announced it is exploring its legal options.
The Reform UK leader of Kent County Council has also said she was writing to fellow leaders in Kent to explore whether they could potentially take legal action.
Image: Police officers ahead of a demonstration outside The Bell Hotel. Pic: PA
Government under pressure
The prospect of more rulings in favour of councils will leave ministers asking where else they might be able to house asylum seekers. Other options may include flats and ex-army bases.
The prime minister and the home secretary are under huge pressure to clear the asylum backlog and stop using hotels across the country to house those waiting for their applications to be processed.
Image: Keir Starmer and Yvette Cooper are under pressure to bring down small boat crossings. Pics: PA
Protests have sprung up at migrant hotels across the country. But The Bell Hotel in Epping became a focal point in recent weeks after an asylum seeker housed there was charged with sexually assaulting a 14-year-old girl.
The council sought an interim High Court injunction to stop migrants from being accommodated at the hotel, owned by Somani Hotels Limited, on the basis that using it for that purpose contravened local planning regulations.
The interim injunction demanded that the hotel be cleared of its occupants within 14 days, but in his ruling on Tuesday, Mr Justice Eyre granted the temporary block, while extending the time limit by which it must stop housing asylum seekers to 12 September.
Somani Hotels said it intended to appeal the decision. Its barrister, Piers Riley-Smith, argued it would set a precedent that could affect “the wider strategy” of housing asylum seekers in hotels.
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Asylum hotels: ‘People have had enough’
Epping hotel ‘sidestepped public scrutiny’
A government attempt to delay the application was rejected by the High Court judge. Home Office barristers had argued the case had a “substantial impact” on the government performing its legal duties to asylum seekers.
But Mr Justice Eyre dismissed the Home Office’s bid, stating that the department’s involvement was “not necessary”.
The judge said the hotel’s owners “sidestepped the public scrutiny and explanation which would otherwise have taken place if an application for planning permission or for a certificate of lawful use had been made”.
Reacting to Tuesday’s judgment, border security minister Dame Angela Eagle said the government will “continue working with local authorities and communities to address legitimate concerns”.
She added: “Our work continues to close all asylum hotels by the end of this parliament.”