Stuart Alderoty calls attention to the SEC’s action in the Ripple case, indicating that the regulator appears to have abandoned its request for nearly $2 billion.
The Ripple Chief Legal Officer (CLO) made this known in an X post over the weekend, emphasizing that the securities regulator has abandoned its ‘absurd’ demand of $2 billion.
SEC’s Proposal in Ripple Case
On March 22, the SEC requested nearly $2 billion in fines for Ripple’s violation of federal securities laws through the unregistered sales of XRP to institutional investors. The fine consists of a civil penalty of $876.3 million, disgorgement of $876.3 million, and a prejudgment interest of $198.15 million, totaling $1.95 billion.
Although Ripple opposed the demand earlier, the crypto payments company recently leveraged the Consent Judgment in the TerraForm Labs’ (TFL) case to argue for a lower penalty of $10 million instead of the SEC’s proposed $2 billion.
In the TFL lawsuit, the defendants agreed to pay a fine of over $4 billion, comprising a $420 million civil penalty and a $3.587 billion disgorgement.
Consequently, Ripple claimed that the TFL’s civil penalty constitutes 1.27% of the company’s $33 billion gross sales, stating that the figure is significantly lower than the amount the SEC requested in its case.
SEC’s $2B Could Drop to $1.1B
However, the SEC faulted Ripple’s claims about TFL’s fine. It argued that the ratio between $420 million and $3.587 billion, as demanded in the TFL lawsuit, amounts to 11.7%. The SEC added that Ripple could pay a civil penalty of $102.6 million if it applies the same 11.7% ratio to the $876.3 million disgorgement it seeks.
This representation could significantly reduce the SEC’s demand from nearly $2 billion to $1,177,050,000 ($1.17 billion). The figure includes $876.3 million in disgorgement, $198.15 million in prejudgment interest, and the newly proposed $102.6 million in civil penalty.
Alderoty Addresses SEC’s Other Arguments
Meanwhile, Alderoty addressed some arguments in the SEC’s latest brief. First, he pointed out that Ripple defended itself, agreeing to none of the SEC’s accusations.
The Ripple CLO said the court gave XRP clarity, declaring the coin a non-security. Additionally, Alderoty noted that the Ripple case has no victims who need compensation. Lastly, he suggested that Ripple is still thriving despite being embroiled in the multi-year legal tussle.
The @SEC is raging. Ripple defended itself – “agreeing to nothing.” The court gave clarity that XRP is not a security. There are no “victims” to compensate. And worst of all for the @SEC, Ripple is thriving. But at least @SEC seems to have abandoned its absurd demand for $2B. https://t.co/KVSkB9OqlH
— Stuart Alderoty (@s_alderoty) June 15, 2024
In the meantime, the parties are awaiting the court’s final verdict, which could be delivered at any moment. Nonetheless, Ripple CEO Brad Garlinghouse estimated that the court could issue the verdict before the end of summer 2024.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.