The ongoing lawsuit between the Ripple Alliance and the SEC has taken a new twist after the Commission withdrew its request for disgorgement, citing LBRY's lack of funds and near-defunct status. On top of that, the Commission has requested a civil penalty of $111,614 and injunction to enjoin LBRY from making any future unregistered offerings of crypto asset securities.

LBRY lost the lawsuit with the SEC and the regulator was looking to impose a massive penalty of $22,151,971, based on the value of the tokens they had sold in the past. Upon request, they have decided to limit their remedies to a much smaller sum of $111,614 and the proposed injunction.

The LBRY incident has driven discussions within the crypto community about the implications for the Ripple case. Crypto lawyer Bill Morgan does not think that it applies to Ripple's current sales of XRP to Over The Counter (OTC) customers. He believes that OTC customers are using XRP for cross-border payments and not as an investment, so there is no need for the token to be destroyed.

Overall, this incident reinforces the idea that the proposed regulation of the crypto space is still vague in many aspects and that unnecessary penalties could be avoided. It also shows that appeals against the SEC can be successful if presented correctly and with a clear legal strategy. This is something that will surely be taken into account by other companies involved in the space going forward.



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