Ripple’s legal team urges a reduced civil penalty in its SEC lawsuit, citing a similar case with Terraform Labs. The SEC demands $2b, but Ripple suggests $10m.
In its lawsuit against the U.S. Securities and Exchange Commission (SEC), attorneys for blockchain startup Ripple have requested that the Court consider an “appropriate” civil penalty in light of a settlement reached between the SEC and Terraform Labs.
Citing a settlement in the Terraform case, Ripple’s legal team filed a notice of additional authority in the U.S. District Court for the Southern District of New York on June 13, citing the “unreasonableness” of the SEC’s civil penalty. A federal judge approved a $4.5 billion agreement between the SEC, Terraform Labs, and its co-founder, Do Kwon, before submission.
The blockchain company has stated that Ripple should only be penalized $10 million, while the SEC has demanded that it pay about $2 billion in disgorgement, prejudgment interest, and civil penalties. Lawyers presented comparable defenses against the fines assessed in the SEC’s lawsuits against Block. One, Genesis Global Capital, and Telegram; however, the submission contained suppressed data about the company’s overall income.
Lawyers for Ripple stated, “As the opposition explained, the SEC has agreed to civil penalties ranging from 0.6% to 1.8% of the defendant’s gross revenues in comparable (and even in more egregious) cases.” “Terraform fits that pattern. In this instance, however, even though there are no claims of fraud and the Institutional Buyers did not sustain significant losses, the SEC is requesting a civil penalty that is significantly higher than that range. Terraform affirms that a civil penalty of little more than $10 million would be acceptable and that the Court should reject the SEC’s exorbitant and unusual proposal.
One of the most extended ripple court cases involving crypto
A jury determined that Kwon and Terraform were liable for fraud following a two-week trial in April. On the other hand, Ripple has been fighting the SEC since December 2020, when the agency said the blockchain startup raised money by using XRP XRP$0.47 as unregistered securities. When Judge Analisa Torres decided in July 2023 that the XRP coin was insecure about programmatic sales on exchanges, it set a significant legal precedent.
In October 2023, the SEC filed a motion to dismiss its lawsuit against Chris Larsen, the executive chair of Ripple, and CEO Brad Garlinghouse, stating that it intended to talk about remedies with the blockchain company at that time. Judge Torres had initially slated the trial between Ripple and the SEC to start in April, but she delayed the case in October 2023 without setting a date for when it would resume. At the time of publication, the judge’s ability to schedule the trial is still being determined.
