Ripple Labs is vigorously contesting a $2 billion fine imposed by the U.S. Securities and Exchange Commission (SEC) in their ongoing legal dispute. In a “notice of supplemental authority” filed on Thursday, Ripple’s legal team argued that the proposed penalty by the SEC is disproportionately severe.
They pointed to the recent settlement involving Terraform Labs, where a $4.47 billion fine was agreed upon following civil fraud allegations, to underscore their contention that Ripple’s case warrants a significantly lower fine.
The Ripple vs SEC lawsuit has garnered considerable scrutiny due to its significant implications. Ripple’s attorneys are leveraging the Terraform Labs settlement, where the company faced civil fraud accusations and settled for a substantial fine, to emphasize the differences in their own case. They assert that Ripple has not been accused of fraud and that institutional investors have not suffered substantial losses.
Ripple’s legal team referenced historical data from the SEC, highlighting that penalties in comparable or more severe cases have typically ranged from 0.6% to 1.8% of the defendant’s gross revenues.
This historical context supports Ripple’s argument for a much lower fine, proposing around $10 million, contrasting sharply with the SEC’s current demands.
While the SEC has yet to respond to Ripple’s latest arguments, the resolution of this case could establish critical precedents for future regulatory actions within the industry.
Judge Analisa Torres has previously ruled on aspects of the case, noting that certain sales of Ripple, termed programmatic sales, did not violate securities laws as they were conducted through a blind bid process. However, she also ruled that direct sales of XRP to institutional investors constituted securities transactions.
The future of crypto regulation hangs in the balance. What outcome do you see for this landmark case? Let’s discuss!
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