Ripple seeks lower fine in SEC case, citing Terra settlement in new filing

Ripple cited the Terra settlement judgment in new filings in the SEC case to support its request to pay a $10 million fine, rather than the $2 billion penalty the SEC had proposed.
In a supplemental authority filing yesterday, Ripple referred to its recent settlement judgment with TerraForm Labs (TFL), pursuant to which the SEC reached an agreement with the company to disgorge more than $35.8 billion and pay a $420 million civil penalty.
Comparison between Ripple and TerraForm Cases
According to Ripple, the civil penalty agreed to in the TFL lawsuit represents 1.27% of the defendants’ total sales, which totaled $33 billion. Notably, Ripple compared the fine in the TFL case to the $2 billion fine proposed by the SEC following the sale of XRP to institutional investors.
Unlike the Ripple lawsuit, the TFL judge found one of the largest securities frauds in U.S. history involving two massive fraud schemes that resulted in $40 billion in losses of investor funds. Ripple also alleged that TFL executives touted false data to attract potential investors while engaging in fraudulent practices behind the scenes to support the token price.
In addition to the TFL case, Ripple mentioned that the SEC typically seeks civil penalties of 0.6% to 1.8% in similar cases.
However, Ripple said the civil penalties sought by securities regulators in the case went far beyond that, despite there being no evidence of fraud. Additionally, Ripple noted that institutional investors did not suffer any losses.
Top lawyers stress importance of up-to-date documents
As expected, the filing sparked reactions across the crypto community, with top lawyers highlighting its importance.
Reacting, Bill Morgan, a prominent attorney supporting XRP, said Ripple’s recent filing highlights the SEC’s particular hostility toward crypto payment companies.
“The SEC acted in bad faith toward Ripple,” said attorney Morgan.
In response, former securities attorney Mark Fager said the SEC’s lenient approach in the TerraForm litigation was due to the settlement status.
Furthermore, he said the fine in the TerraForm settlement was fictitious, emphasizing that the money no longer existed. Fager added that there is no guarantee the SEC will receive anywhere near the amount requested.
Notably, CryptoQuant CEO Ki Young Ju questioned where Terraform Labs would get the funds to resolve the SEC’s issues, as it claimed to have depleted its reserves during the Terra collapse two years ago.
Current Status of SEC v. Ripple Case
Meanwhile, while the SEC is seeking nearly $2 billion in penalties in the Ripple lawsuit, the defendants argue that civil penalties should not exceed $10 million. Both parties have filed the necessary documents and are awaiting the final decision of the court, which could come any time.
As Cointelegraph reported yesterday, Ripple CEO Brad Garlinghouse estimated that the court will issue a final ruling by September 21, the end of the astronomical summer. Whether Garlinghouse's prediction will come true remains to be seen. Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article may reflect the personal opinions of the author and do not necessarily reflect the opinions of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.