Ripple’s $770 Million Fine is ‘Unjustified’: Legal Experts Slam SEC

In a recent discussion about Ripple, attorney Jeremy Hogan shared his thoughts on the ongoing legal battle of Ripple vs. Securities and Exchange Commission (SEC). Hogan believes there’s a good chance that Ripple might see a significant reduction in the hefty $770 million fine hanging over its head.

Obviously, this would be a big win for the company.

Key Strategies for Ripple’s Defense

Hogan highlighted several vital points Ripple should emphasize to minimize the damages sought by the SEC, citing support from current case law and the specifics of Ripple’s XRP sales.

1. Distinction in “Disgorgement” Basis: Hogan stressed that Ripple should base the “disgorgement” amount on its net earnings rather than the total amount. This approach would allow Ripple to account for company expenditures, potentially leading to a substantially reduced overall penalty.
2. “Nexus” Concern: Hogan pointed out that the SEC is only responsible for sales with a U.S. nexus. This factor raises questions about the geographical limitations of any financial penalties, further restricting their scope.

Read More: Ripple Lawsuit: 99.1% Chance of Win Against SEC, Predicts Deaton

SEC Faces a Losing Streak

Stuart Alderoty, Chief Legal Officer of Ripple, also shared his perspective, referring to the SEC v. Govil case as an important precedent. He suggested that the extent of Ripple’s liability might depend on whether XRP investors have suffered significant financial losses.

This factor is crucial in determining the disgorgement amount. Alderoty also mentioned the recent defeats the SEC has faced, including a ruling by the Fifth Circuit that found the SEC’s actions to be arbitrary and capricious, violating the Administrative Procedure Act (APA).

Investors Have Been Kept Safe!

In response, Mobarak argued that, since there’s no evidence of harm to investors, the SEC cannot reasonably justify imposing a massive $770 million fine on Ripple for its institutional XRP sales breach. According to Mobarak, it’s clear that the SEC lacks a solid basis for imposing such substantial fines on Ripple when there’s no proof of harm to investors.

“The SEC can’t demand a $770 million penalty from Ripple for institutional sales without proof of investor harm.”

Also Read: SEC Under Fire for Lawbreaking With SAB 121: John Deaton Lashes Out

How much do you think Ripple’s fine should be reduced?