SEC firmly rejects Ripple’s argument for lower fine

The US Securities and Exchange Commission (SEC) is demanding a monster fine of almost $2 billion in its brutal legal battle with Ripple, the company behind XRP.

However, the crypto company does not want to pay more than $10 million, and has recently pointed to the fine against Terraform Labs as an argument. The regulator is now sending Ripple’s request straight to the trash.

Monsterboete Ripple

Ripple has been involved in a lawsuit with the financial watchdog since the end of 2020 because it is accused of selling XRP as an unregistered security (security).

Last summer, Ripple scored a major victory when the judge ruled that the sale of XRP on trading exchanges is not covered by securities law. Institutional sales, on the other hand, do, and the SEC wants Ripple to pay heavily for violating the law.

In March, the SEC demanded that a judge impose an astronomical fine of $1.95 billion on Ripple. Ripple has counterattacked with a $10 million proposal, but last month the proposal was rejected by the regulator.

Specifically, the SEC wants Ripple to pay a civil penalty of $876.3 million, as well as $198.2 million in interest and $876.3 million in ill-gotten gains.

Ripple points to Terraform fine, SEC responds

A few days ago you could read that Terraform Labs, the company behind the collapsed Terra (LUNA), had reached a $4.47 billion settlement with the SEC including a $420 million civil penalty. Ripple’s lawyers pointed to this fine in their lawsuit as an argument why the SEC’s demand is insane.

The regulator has now responded by stating that the case with Terraform Labs cannot be compared to that of Ripple.

According to Ripple, the civil penalty for Terraform Labs is approximately 1.27% of its $33 billion in gross revenue, which is a lot lower than the SEC’s demand against them. However, according to the committee, the fine against Terraform Labs is measured against the gross profit from unlawful activities, which would bring the ratio to 12%.

If the same ratio were applied to Ripple, the fine would be $102.6 million. ““Such a small penalty would not meet the purposes of the civil penalties laws,” the SEC concluded.

In addition, the SEC indicated that the amount of the fine for Terraform Labs was influenced by the fact that the company had filed for bankruptcy, investors needed to be compensated, and top executives had been fired.

Overall, the SEC and Ripple remain at odds on this issue. However, the end of the trial appears to be near, with a possible verdict between the end of July and the beginning of August.

Trade €10,000 for free and get a 10 euro bonus

Do you want to enter the crypto world and perhaps buy XRP or another crypto? Then grab your chance now with this exclusive offer! Thanks to a special deal between Newsbit and Bitvavo, one of the most accessible and user-friendly crypto exchanges in Europe, our readers receive an exclusive offer.

Create an account with Bitvavo via the button below and receive a welcome gift of 10 euros completely free. And that’s not all – you also don’t pay trading fees on your first 10,000 euros in transactions. Register now!