Ripple seeks a settlement that is less than the initial $1.95 billion charged by the SEC, using Terraform as an example.
To justify a reduced sanction against itself, Ripple Labs references the settlement between the Security Exchange Commission (SEC) and Terraform Labs.
The SEC I had initially requested a $1.95 billion settlement from Ripple as a penalty for the purported sale of unregistered securities. Nevertheless, the organization is contesting the proposed punishment, contending that it is excessive and should be reduced to a mere $10 million.
Ripple Emphasizes the SEC’s Differing Approach in Comparison to the Terraform Labs Case
In a filing released yesterday titled “TerraForm Notice of Supplemental Authority,” the defendant’s attorney referenced the $4.47 billion settlement with Terraform Labs as a comparable case. They contended that the penalties imposed on Ripple are excessively severe, citing that the regulatory body has consented to civil penalties for similar offenses and that the penalties range from 0.6% to 1.8% of the defendant’s aggregate revenues. This category encompasses the proposed $10 million sanction for the blockchain company.
Ripple also underscored that, in contrast to Terraform, it was not accused of fraud but was charged with distributing unregistered securities. Nevertheless, the financial authority is imposing a more severe penalty. The attorney representing the defendant rendered the following statement:
“As Ripple’s opposition explained, in incomparable (and even more egregious) cases, the SEC has agreed to civil penalties ranging from 0.6% to 1.8% of the defendant’s gross revenues.SeeECF No. 955 at 29-30. Terraform fits that pattern. Here, by contrast, the SEC seeks a civil penalty far exceeding that range, even though there are no allegations of fraud in this case, and Institutional Buyers did not suffer substantial losses.”
Bill Morgan, an XRP litigator, also echoed this sentiment and disclosed that the SEC’s stance toward Ripple is unjustified on his X page. The commission accepted a judgment for a penalty that amounted to only 1.27% of Terra’s gross sales, even though a jury verdict found Terraform guilty of “one of the largest securities frauds in US history,” as he mentioned. Nevertheless, the regulator is imposing a fine of $876 million on Ripple despite the absence of any fraud allegations. Morgan stated:
“Against Ripple in a case in which there was no allegations of fraud and institutional buyers suffered no losses, the SEC seeks a penalty of $876 million, which Ripple alleged was 20 times more than any other penalty in crypto-related cases at that time.”
XRP Price Continues to Fail in the Face of Ripple-SEC Concerns
Despite this, the price of XRP has continued to decline, with a loss of over 10% over the past eight days. Since mid-April, it has fluctuated between $0.45 and $0.55. This is not correlated with the prices of Bitcoin, Ethereum, and numerous other significant altcoins; despite the fact that they have also experienced declines in the past few days, their prices have recently increased.
XRP has also been one of the most underperforming top cryptos, not typically following the bullish moves of others but always fast to decline further when they do. The entire legal matter is undoubtedly influencing the coin’s market sentiment.