New Ripple case documents spark XRP community settlement debate

Based on the latest filings from the U.S. Securities and Exchange Commission (SEC) in the Ripple case, XRP community members have speculated that the parties could reach a settlement this summer.
The SEC has filed a response, setting forth the evidence for Ripple’s request for a supplemental authorization in its consent decree in the SEC’s lawsuit.
Ripple Supplemental Authorization
Recall the letter Ripple submitted on June 13 to further support its remedial action against the SEC’s request for $2 billion in damages. Pursuant to the TFL consent judgment, the defendants agreed to resolve the SEC action by paying more than $3.58 billion in disgorgement and a $420 million civil penalty.
Therefore, Ripple argues that the civil penalty is equal to 1.27% of TFL’s total sales of $33 billion. The crypto payments company said the agreed amount was significantly less than what the SEC sought in its case. Additionally, Ripple argued that there was no evidence of fraud in its case, despite Judge TFL revealing two fraud schemes that resulted in losses of more than $40 billion.
SEC Response
Veteran defense attorney James K. Filan shared the SEC’s response today. According to the filing, the SEC emphasized that TFL’s consent decree resulted from a settlement that generated a series of value-limiting events, adding that these events were of limited value in determining the remedy.
Ripple asked the court to tie the determination of the TFL settlement to the determination of its penalty, with the SEC arguing that the crypto payments company failed to take certain factors into account. These factors include TFL’s bankruptcy, the company’s agreement to destroy the keys to wallets holding crypto assets, and to compensate investors for significant amounts of losses.
“In agreeing to the Settlement, the SEC considered all of these factors and prescribes them as facts for the Court to approve the Settlement in accordance with applicable law,” the regulator said.
However, the SEC noted that Ripple did not agree to any of the relief cited in the TFL case. The SEC stressed that the TFL settlement was irrelevant in determining the penalty to punish Ripple because the latter did not admit to violating securities laws. The SEC alleges that Ripple continues to “enrich itself” by engaging in conduct that is very similar to the initial securities law violations.
SEC criticizes Ripple’s presentation of TFL penalty ratio
Additionally, the SEC criticized Ripple for comparing TFL’s $420 million civil penalty to its $33 billion in total sales, noting that the fine should be compared to its total net profit of $35.87 billion.
The securities regulator said the ratio of $420 million to $35.87 billion was as high as 11.7%. The SEC claims that applying that figure to Ripple’s $876.3 million in total net profits, and seeking $358.7 million in disgorgement, would also result in a potential penalty of $102.6 million, rather than the $10 million cap that the defendants insisted on.
XRP Community Believes Settlement Could Be Reached This Summer
Based on the SEC’s estimate, XRP community members speculated that the SEC v. Ripple case could reach a settlement.
Abdullah “Abs” Nassif, host of the Good Morning Crypto podcast, said the SEC is now asking for a $102.6 million settlement, rather than the nearly $2 billion it initially sought.
He launched a poll urging XRP enthusiasts to vote on whether they think the SEC and Ripple will reach a settlement this summer. With 13 hours remaining before the polls close, 69.11 of the 780 votes cast so far believe that the parties will reach a settlement this summer. Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinions of The Crypto Basic. Readers are encouraged to perform adequate research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.