Ripple vs SEC Lawsuit Possibility of Reducing 2B Fine and Impact of Terraform Labs Settlement on Outcome
Ripple Labs has taken on the U.S. Securities and Exchange Commission (SEC) regarding the $2 billion fine imposed in their ongoing legal battle. In a recent filing, the company’s legal team argued that the SEC’s proposed penalty is overly harsh. They highlighted the recent settlement with Terraform Labs and urged the court to consider a much lower fine for Ripple.
Drawing on the Terraform Labs Settlement
The Ripple vs SEC lawsuit has been closely watched due to its high stakes. To bolster their case, Ripple’s lawyers are pointing to the recent settlement reached by Terraform Labs, which resulted in a $4.47 billion fine for alleged civil fraud. Ripple contends that their situation is distinct as they were not accused of fraud and institutional investors did not suffer significant losses.
Furthermore, Ripple cited past SEC cases where penalties ranged from 0.6% to 1.8% of the defendant’s revenue in similar or more severe circumstances. This argument supports Ripple’s request for a penalty closer to $10 million, rather than the hefty sum demanded by the SEC.
Implications for the Legal Landscape
The outcome of the SEC vs Ripple lawsuit carries weighty implications for the regulation of digital assets. Ripple’s case, alongside the Terraform settlement, sheds light on how financial penalties are determined in the evolving crypto industry. While the SEC has yet to respond to Ripple’s latest arguments, the resolution of this case could set important precedents for future legal battles.
Judge Analisa Torres previously indicated that certain sales of Ripple, known as programmatic, did not violate securities laws as they were conducted through a blind bidding process. However, she also noted that direct XRP sales to institutional investors were considered securities transactions. This nuanced ruling adds complexity to Ripple’s legal situation and underscores the challenges of regulatory compliance in the digital asset sphere.
As Ripple and the SEC continue their legal showdown, the outcome of this case will have far-reaching effects on the cryptocurrency sector.
Don’t miss:
Ripple vs SEC is FINALLY Ending! Can XRP Escape the ‘Security’ Label?
Tags
Ripple (XRP)