Ripple Labs, embroiled in a years-long legal dispute with the SEC, is challenging the agency’s proposed financial penalties as excessive. In a recent court filing, Ripple argues that the SEC’s $2 billion fine for XRP sales is unreasonable compared to the recent settlement with Terraform Labs.
The SEC considers XRP, Ripple’s native token, an unregistered security. Ripple vehemently disagrees, calling for a significantly lower penalty closer to $10 million. Their argument hinges on the SEC’s settlement with Terraform Labs, the developer behind the UST stablecoin. Terraform agreed to pay a $4.47 billion fine for alleged violations surrounding UST.
“The civil penalty sought by the SEC in Terraform demonstrates the unreasonableness of the penalty sought in this case,” Ripple’s lawyers stated. They point out that the SEC typically settles similar cases for much smaller percentages of a defendant’s revenue, with Terraform falling within that range. Additionally, Ripple emphasizes the absence of fraud allegations in their case, unlike Terraform’s situation.
Also Read: XRP Soars (2.34%) As Ripple Unveils XRPL EVM Sidechain For Enhanced DeFi & RWA Tokenization
This filing adds another layer to the ongoing Ripple vs. SEC saga. The SEC initially accused Ripple of conducting an unregistered securities offering of XRP, raising over $1.3 billion. Last year, a judge partially sided with both parties. While some XRP sales were deemed non-securities due to their structure, direct sales to institutional investors were classified as securities offerings.
The outcome of this legal battle holds significant weight for the cryptocurrency industry. A clear definition of how the SEC classifies digital assets like XRP could significantly impact future regulations and market behavior.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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