[ad_1]
Ripple Labs has challenged the U.S. Securities and Exchange Commission (SEC) on their $2 billion fine in the ongoing lawsuit. On Thursday, the company’s attorney stated in a “notice of supplemental authority” that the penalty proposed by the SEC is excessively punitive. In addition, they brought the comparison with the recent Terraform Labs settlement, and persuaded the court that the case of Ripple can be justified through a significantly lower fine.
Leveraging the Terraform Labs Settlement
The Ripple vs SEC lawsuit has witnessed extreme scrutiny as well as high stakes. Therefore, Ripple’s lawyers are now leveraging the recent settlement that Terraform Labs had, where they agreed to a fine of $4.47 billion after being alleged of civil fraud. Ripple has argued that this situation was significantly different, since they themselves were not charged with any allegations of fraud, and also the institutional investors did not go through significant losses.
Moreover, they mentioned historical data of the SEC itself, pointing out that in similar or even more severe cases, only 0.6% to 1.8% of the defendant’s gross revenues were charged as penalty. Hence, this argument makes their plea for a penalty that is around $10 million, which does not align with the current high demands of the SEC.
Implications for the Legal Landscape
The unfolding of this SEC vs Ripple lawsuit has broader implications on the regulatory environment of digital assets. Ripple’s case along with the settlement of Terraform explain how financial penalties are decided in the ever-changing crypto sector. The SEC has not yet responded to the latest arguments and plea by Ripple, but the outcome of this case could have significant precedents for similar lawsuits in future.
In addition, Judge Analisa Torres has previously mentioned that some sales of Ripple, called programmatic, did not actually violate any securities law as they were executed through a blind bid process. However, she did also mention that direct XRP sales to institutional investors were securities transactions. Therefore, this is a nuanced ruling, which brings in more complications in the legal scenario of Ripple and sheds light on the complexity of regulatory compliance in the sphere of digital assets.
As Ripple and the SEC continue their courtroom battle, the consequences of this case will largely affect the cryptocurrency industry.
[ad_2]
