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The United States Securities and Exchange Commission (SEC) and Ripple Labs <a href="https://thecoinrise.com/ripple-exec-not-a-fan-of-recent-actions-taken-by-the-sec/">legal war got intense</a> as the agency turned down the firm’s request for a reduced penalty. On June 13, Ripple requested that Judge Analisa Torres of the United States District Court for the Southern District of New York cap its penalty at $10 million, starkly contrasting the SEC’s proposed $876.3 million civil penalty. 
<h2 id="span-style-font-weight-400-ripple-targets-the-sec-span">Ripple Targets the SEC</h2> 
Ripple also highlighted the SEC’s recent $4.5 billion settlement with Terraform Labs and its co-founder Do Kwon. The settlement ended with the latter paying a $420 million civil penalty.&nbsp; 
<a href="https://thecoinrise.com/ripple-xrpl-sees-transaction-surge-as-costs-drop-in-q1-2024/">The American firm</a> believes that this penalty, which represents about 1.27% of Terraform’s $33 billion gross sales, should set a precedent for its own case. The following day, however, the SEC refuted this comparison in a letter to Judge Torres, arguing that the circumstances surrounding the Terraform settlement were not analogous to Ripple’s situation. 
Notably, Ripple secured a partial victory against the agency as Judge Analisa Torres said that the XRP tokens sold to retail investors are not securities. 
<h3 id="span-style-font-weight-400-the-sec-retaliates-span">The SEC Retaliates</h3> 
In its June 14 <a href="https://x.com/s_alderoty/status/1802093640082133027">letter</a>, the SEC highlighted prominent differences between the two cases. It noted that Terraform Labs, being bankrupt, had agreed to return money to investors and had replaced its leadership team responsible for the violations. 
It seems that the regulator is trying to get back at the firm following its loss which shook the foundations of all previous cases brought forth by the regulator <a href="https://thecoinrise.com/ripple-ceo-warns-of-us-government-targeting-tether/">against crypto firms</a>. 
The legal battle between the SEC and Ripple began in 2020 when the SEC accused Ripple of selling unregistered securities. 
“Ripple is agreeing to none of this relief — in fact, Ripple is agreeing to nothing,” the SEC stated, emphasizing that Ripple’s stance was fundamentally different from Terraform’s cooperative approach. 
<h3 id="span-style-font-weight-400-contesting-ripple-s-comparisons-span">Contesting Ripple’s Comparisons</h3> 
The SEC contested Ripple’s financial comparisons, explaining that the $420 million civil penalty imposed on Terraform was based on the gross profit of its violative conduct, which amounted to over $3.5 billion. This penalty, representing nearly 12% of Terraform’s gross profits, was <a href="https://thecoinrise.com/ripple-ceo-slams-sec-for-its-crypto-policies/">more substantial than the percentage Ripple suggested</a>. Applying the same ratio to Ripple’s gross profits of $876.3 million would result in a $102.6 million penalty, which the SEC argued would be insufficient under civil penalty statutes. 
The SEC maintained that the penalties proposed for Ripple, totaling nearly $2 billion, were necessary to meet statutory requirements. This total includes $198.2 million in prejudgment interest, alongside the $876.3 million in both civil penalty and disgorgement. The regulator argued that a reduced penalty would undermine the purposes of the civil penalty statutes. 
The post <a href="https://thecoinrise.com/sec-and-ripple-clash-over-penalty-amount-in-high-stakes-legal-battle/">SEC and Ripple Clash Over Penalty Amount in High-Stakes Legal Battle</a> appeared first on <a href="https://thecoinrise.com">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

SEC and Ripple Clash Over Penalty Amount in High-Stakes Legal Battle

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