Update on Ripple v SEC Case as of June 14 2024
Ripple, in an ongoing legal dispute with the United States Securities and Exchange Commission (SEC), has submitted a new argument against the SEC’s request for a hefty penalty related to Ripple’s institutional XRP sales. The legal team at Ripple filed a Notice of Supplemental Authority concerning the Consent Judgment in the SEC’s case against Terraform Labs.
The argument highlights that Terraform Labs has been ordered to pay a substantial sum of $3,586,875,883 in disgorgement, along with a civil penalty of $420,000,000, which amounts to about 1.27% of their $33 billion gross sales. This serves as a benchmark to demonstrate the excessive penalty sought by the SEC in Ripple’s case. The argument points out that in similar cases, the SEC has settled for civil penalties ranging from 0.6% to 1.8% of the defendant’s gross revenues, indicating that the penalty sought in Ripple’s case is disproportionate and unjustified.
Ripple’s legal team argues that the SEC’s request for a civil penalty in their case far exceeds the range seen in other cases, despite the absence of fraud allegations and significant losses for Institutional Buyers. They suggest that a more appropriate civil penalty would be no more than $10 million.
In a separate development, the SEC recently sought approval for a final consent judgment in the case against Terraform Labs, following a jury verdict holding the company and its former CEO liable for orchestrating a large securities fraud scheme. This involved misleading potential investors with false transaction data and manipulating token prices, resulting in substantial investor losses.
As a result of the settlement with the SEC, Terraform Labs has announced plans to wind down its operations. Meanwhile, XRP, the cryptocurrency central to the Ripple v. SEC legal battle, was trading at $0.48 at the time of reporting, experiencing a decline of 2.30% in the day, 9.03% over the week, and 4.34% on the monthly chart.
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