Ripple Labs Criticizes SECs 2 Billion Fine as Excessive Cites Terraform and Settlement 10 Million Fine Would be Appropriate
Report, Ripple Labs, embroiled in a long-standing legal battle with the U.S. Securities and Exchange Commission (SEC), strongly opposes the $2 billion fine sought by the SEC in court documents filed on Thursday, citing the judgment in the Terraform settlement on Wednesday and arguing that a fine not exceeding $10 million would be more reasonable.
According to a “Notice of Supplemental Authority” submitted by Ripple Labs yesterday (13), the company compared the $20 billion fine proposed by the SEC with the $45 billion fine against Terraform Labs and expressed its opposition.
The SEC’s handling of the Terraform case and the final civil fine indicate that the civil penalties sought by the SEC against Ripple are quite unreasonable.
The document stated that even though Terraform Labs and its CEO, Do Kwon, caused global investors to lose over $40 billion, they faced only a civil fine of about $45 billion.
Previously, lawyers for Terraform and Do Kwon had also negotiated with the SEC’s claim of a $53 billion civil fine, arguing that a maximum fine of $1 million would be more appropriate.
In similar cases, SEC fines are usually between 0.6% and 1.8% of the defendant’s total revenue. Considering Ripple’s $1.3 billion in revenue from selling XRP, we suggest a more reasonable fine for Ripple, up to $10 million.
The lawyer also mentioned that Terraform and its founder Do Kwon are accused of civil fraud; while Ripple does not face any fraud charges, and institutional investors have not suffered any losses as a result.
Bill Morgan, a legal professional, agrees that the SEC’s punishment in this case is untenable, noting the agency’s long-standing strange hostility towards Ripple.
As the lawsuit between the SEC and Ripple enters its fourth year, the SEC submitted its final defense in the litigation remedy phase last month and may set a precedent for the treatment of cryptocurrency under U.S. securities law in September.
Despite years of litigation, Ripple continues to develop new products and expand its business, including acquiring digital asset custodian Standard Custody and launching the new stablecoin $RLUSD.
