- The SEC has officially waived the “Bad Actor” disqualification for Ripple.
- The move allows Ripple to once again use key exemptions to raise capital privately.
- Experts believe this also strengthens Ripple’s ongoing bid for a US national bank charter.
Ripple has scored another major legal victory against the SEC. Just days after their main lawsuit officially ended, the regulator has now waived the “Bad Actor” disqualification that had been hanging over the company since last year..
Why this matters: This waiver helps Ripple fund its global ambitions. Here’s our report on Ripple’s $500 million expansion into Africa.
What Was the “Bad Actor” Disqualification?
The “Bad Actor” status stemmed from a court injunction in August 2024 that found Ripple had violated securities law by selling unregistered securities to institutions.
That ruling effectively barred Ripple from using certain exemptions, like Regulation D’s Rule 506, which are crucial for raising capital privately without a full, costly SEC registration process.
How It Got Here
Even though Ripple and the SEC had settled and jointly asked the court to dissolve the injunction earlier this year, Judge Analisa Torres surprisingly declined their request in May, leaving the injunction in place, and the “Bad Actor” label intact.
The SEC has now used its own authority to grant a waiver, stating it found “good cause” to do so and noting that their settlement with Ripple would have removed the disqualification anyway.
What This Means for Ripple
With the waiver in place, Ripple can once again conduct exempt securities offerings under Regulation D.
Attorney Bill Morgan, a frequent commentator on the Ripple-SEC case, called the waiver “the next best thing” given that Judge Torres refused to dissolve the injunction. He said, “This will help Ripple raise capital. Ripple is no longer barred from conducting exempt securities offerings. It may also help Ripple achieve broader business objectives including its application for a national bank charter.”
CoinEditon’s report shows you how Ripple timed their $200M Rail acquisition to perfection ahead of the SEC case closure.
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