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SEC Rejects Ripple’s Bid for Lower Penalty

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SEC Rejects Ripple’s Bid for Lower Penalty

The United States Securities and Exchange Commission (SEC) recently expressed its dissatisfaction with Ripple Labs’ latest plea for a reduced penalty, asserting that the request is insufficient. Last week, Ripple appealed to New York District Court Judge Analisa Torres on June 13, citing the SEC’s settlement with Terraform Labs. Ripple asked for a penalty “no more than $10 million,” markedly lower than the SEC’s recommended civil penalty of $876.3 million.

On June 14, in a letter to Judge Torres, the SEC responded to Ripple’s request, referencing its $4.5 billion settlement with Terraform Labs and co-founder Do Kwon, which included a $420 million civil penalty. The SEC noted that the settlement with Terraform took into consideration the firm’s bankrupt status, their agreement to repay investors, and the dismissal of leaders responsible for the violations. In stark contrast, the SEC pointed out that Ripple has not agreed to any similar measures.

Ripple had argued that the $420 million civil penalty imposed on Terraform was roughly 1.27% of Terraform’s “gross sales” of $33 billion. The SEC countered that this comparison was not valid, emphasizing that it had calculated Terraform’s penalty based on the “gross profit of the violative conduct,” which was estimated to be over $3.5 billion, placing the penalty at nearly 12%.

According to the SEC, if the same ratio were applied to Ripple — specifically to the $876.3 million in gross profits Ripple sought to disgorge — the civil penalty would amount to $102.6 million. The SEC argued that such a low penalty would fail to achieve the intended goals of civil penalty statutes.

The SEC’s suggested penalties for Ripple are significantly higher, totaling nearly $2 billion. This amount includes $198.2 million in prejudgment interest, $876.3 million as a civil penalty, and another $876.3 million in disgorgement. The SEC’s stringent stance underscores the gravity it places on regulatory compliance.

The prolonged legal battle between the SEC and Ripple began in 2020 when the SEC accused Ripple of selling unregistered securities. Judge Torres concurred with the SEC that Ripple’s sales to institutional investors were indeed unregistered securities.

Last month, the SEC contested Ripple’s intention to keep some of its financial details confidential. The regulatory body argued that Ripple should reveal the revenue it generated from XRP sales, which Judge Torres had ruled were unregistered.

The disagreement between the SEC and Ripple continues to be a matter of significant interest within the financial and cryptocurrency communities. The outcome of this case could set a precedent for how similar cases are managed in the future, impacting regulatory approaches and corporate strategies moving forward.

The SEC remains steadfast in its mission to ensure that penalties for violations are substantial enough to serve as a deterrent, emphasizing the need for transparency and accountability within financial markets. Ripple, Continues to seek more lenient treatment, aiming to minimize its financial liabilities.

As the court proceedings advance, the confrontation between regulatory oversight and corporate defense strategies remains a critical aspect to watch. The resolution of this case will likely have lasting implications on the governance of digital assets. The legal and regulatory landscape for cryptocurrency firms may be significantly shaped by the final judgments and terms agreed upon in this landmark case.

40 thoughts on “SEC Rejects Ripple’s Bid for Lower Penalty

  1. Fascinating article! The SEC’s steadfast approach is crucial for accountability in the crypto space!

  2. Ripple’s approach to a lower penalty may not hold water against the SEC’s robust counter! 🌊

  3. The figures involved are mind-blowing. This case is indeed a big one for the crypto community!

  4. Ridiculous penalties from the SEC again! How can they justify such astronomical amounts when comparing Ripple to Terraform? It’s beyond belief.

  5. Ripple’s appeal might face an uphill battle with the SEC’s well-substantiated stance. Let’s see where this goes! 🧭

  6. I can’t believe the SEC is going this far! Ripple’s appeal is completely justified. The SEC should be more consistent and fair in its penalties.

  7. Ripple’s lower penalty request is quite bold. The SEC’s approach seems more justified.

  8. This case is highlighting the necessity for clear regulations in the crypto industry. Important discussions! 💡

  9. The SEC’s actions are a big step towards safer and more reliable financial markets. Necessary vigilance!

  10. This ongoing legal battle is giving a lot of insights into how digital assets should be regulated. 📚

  11. The SEC’s stance is unbelievably strict. Ripple’s request for a lower penalty seems reasonable considering the circumstances. This isn’t justice; it’s a shakedown!

  12. Ripple’s defense is interesting but the SEC’s arguments are comprehensive. Both sides are making strong cases!

  13. What’s the SEC’s endgame here? $102.6 million should suffice, not nearly $2 billion. The SEC should be promoting compliance, not crushing companies.

  14. Why is the SEC hell-bent on destroying Ripple? $876.3 million in civil penalties is just absurd. Seriously, where’s the proportionality here?

  15. Ripple should focus on rebuilding trust through compliance and transparency. Trust is everything!

  16. Talk about heavy-handed regulation! The SEC’s stance here is absurdly harsh and completely unwarranted. This could potentially cripple Ripple and send the wrong message to other companies.

  17. A $2 billion penalty is massive! The SEC is definitely cracking down on violations! 💥

  18. Anyone else feel like the SEC is dragging this out to flex its muscles? Ripple’s penalty request is justified. It’s about time for the SEC to act reasonably.

  19. Intriguing developments! The SEC’s tough stance is a clear message to all crypto firms.

  20. Ripple’s plea might be a bit too optimistic. The SEC’s rigorous stance is understandable! 🧐

  21. Kudos to SEC for maintaining the integrity of financial markets. The crypto space needs this vigilance!

  22. Ensuring that penalties act as deterrents is critical. The SEC’s determination is commendable! 💪

  23. Ripple should consider collaborating more thoroughly with the SEC. Compliance is key! 🔑

  24. Ripple’s plea seems quite a reach considering the severity of the allegations. Justice must be fair! ⚖️

  25. Props to Ripple for standing their ground! The SEC’s penalties are excessive and seem more punitive than fair. The discrepancy between penalties for Terraform and Ripple is just unfair.

  26. The SEC is clearly trying to set an unreasonable precedent. Ripple shouldn’t be taxed with such ridiculous amounts. It almost feels like a witch hunt at this point.

  27. This prolonged legal battle is exhausting and the SEC’s demands are excessive. Ripple should not be made the poster child for the SECs aggressive policies.

  28. It’s a stark reminder of the importance of regulatory frameworks. Well done, SEC!

  29. Wow, Judge Torres has her work cut out for her. This case could reshape crypto regulations!

  30. A landmark decision in the making! All eyes on Judge Torres and the final verdict!

  31. This whole situation feels like a power trip by the SEC. $2 billion in penalties? That’s absolutely insane! They’re clearly trying to make an example out of Ripple.

  32. Ripple vs. SEC continues to be an epic saga. The ramifications will be felt for years!

  33. The SEC’s approach makes no sense. Ripple has a valid point, and crushing fines won’t help anyone. Regulatory bodies need a balance between enforcement and fairness.

  34. This case could indeed set a landmark precedent for future crypto cases. Exciting times!

  35. The SEC is completely overreaching here! How are these exorbitant penalties supposed to help anyone? Ripple shouldn’t be punished so harshly!

  36. The SEC needs to reconsider its approach. Penalizing Ripple to the tune of $2 billion is just draconian. Are they trying to bankrupt the company or what?

  37. This relentless pursuit of Ripple is getting out of hand. The $10 million penalty request was fair and reasonable, unlike the SEC’s draconian demands.

  38. Keeping financial details confidential seems like a questionable move by Ripple. Openness is necessary!

  39. The SEC is clearly emphasizing the importance of transparent and accountable financial practices. Transparency is crucial! 🌐

  40. Ripple needs to rethink its strategy. Cooperation might lead to a better resolution.

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