SEC denies Ripple's bid for reduced penalty 🚫💸

Ripple Faces Uphill Battle in Legal Clash with the SEC

The ongoing legal dispute between the SEC and Ripple Labs has entered a new phase with the SEC rejecting Ripple’s plea for a reduced civil penalty.

SEC Rejects Ripple’s Proposal for Lower Penalty

In the latest development, Ripple sought a maximum penalty of $10 million, well below the SEC’s demand for a $876.3 million civil penalty.

Ripple referenced the SEC’s settlement with Terraform Labs and its co-founder, Do Kwon, in an effort to justify a reduced penalty.
The $4.5 billion settlement included a $420 million civil penalty, which Ripple argued constituted about 1.27% of Terraform Labs’ gross sales.

SEC Counters Ripple’s Argument

On the other hand, the SEC challenged Ripple’s comparison, stating that the cases were not directly comparable.

The SEC highlighted that Terraform Labs, now bankrupt, had agreed to reimburse investors and replaced the leaders responsible for the violations.
Unlike Terraform Labs, Ripple has not agreed to any such restitution measures, the SEC emphasized.

SEC Seeks Nearly $2 Billion in Penalties

The SEC is pursuing a significant penalty from Ripple, amounting to nearly $2 billion, which includes disgorgement, prejudgment interest, and civil penalties.

This hefty fine is intended to deter violations and promote accountability within the cryptocurrency sector.
The SEC is adamant about enforcing responsibility and deterring future misconduct through stringent penalties.

Legal Battle Origins and Ongoing Proceedings

The legal clash between Ripple and the SEC commenced in 2020 when the SEC alleged that Ripple had distributed unregistered securities.

Judge Analisa Torres’s ruling in July 2023 confirmed that Ripple had indeed sold unregistered securities, but solely to institutional investors.

The dispute continues as the SEC opposes Ripple’s move to seal financial documents, insisting on full disclosure of revenue generated from the sale of unregistered securities.