(BTC) Bitcoin News TodayBinance Coin (BNB)CryptocurrencyCryptocurrency RegulationEthereum (ETH)NewsRipple (XRP)Solana (SOL)StablecoinStakingTether (USDT)

Ripple Labs Adduces Terra Settlement Petitioning Lower Penalty to $10M

Ripple Labs, through its lead attorney, filed an appeal that pointed to the Terra $4.5B settlement, urging for a lower penalty given no allegations of fraud. The US company behind Ripple payment protocol and cross-border payments seeks a lower penalty from $2B to $10M.

The Brad Garlinghouse-led firm is behind the XRP token, which is ranked the eighth largest crypto with a market capitalization of $27.185B, according to CoinGecko.

Ripple Labs Urges Lower Penalty to $10 Million

Ripple Labs’ recent submission in the ongoing legal battle with the Securities and Exchange Commission (SEC) cited the $4.5 billion that Terraform Labs will settle. The company utilized such evidence to lower the penalty to $10 million. 

The Gary Gensler-led SEC had proposed a $2 billion civil penalty that Ripple should pay. The proposed penalty features $876M in disgorgement, $198M in prejudgment interest, and $876M for the civil penalty. 

Ripple discloses new evidence in the letter to warrant the argument for the lower penalty. The submission cites Terraform Labs, which is accused of a $40B loss in investor funds, is set to settle the case for slightly over $4B.  

The lawsuit arose from the sudden implosion of Terraform in May 2022, plunging the entire crypto industry into an extended crypto winter. Ripple Labs disputes its wrongdoing barely matches half the $40 billion loss in investor assets to warrant the $2 billion penalty. 

Terraform Labs settlement involves $3.6B in disgorgement and $420M in civil penalty. Terra founder Do Kwon is set to pay $205 million. 

📰 Also read:  There Is a Possibility That Politicians Are Utilising Cryptocurrency to Influence Elections in the United States

“The civil penalty estimates 1.27% of defendants’ gross sales approximated as $33 billion. Ripple Labs added that other cases where the SEC has agreed to settlement have the amount in a 0.6% – 1.8% range of the gross earnings.  

Ripple Labs indicates the SEC seeks a penalty that far surpasses the range despite the absence of fraud allegations. The XRP lawyers indicated that the institutional buyers hardly suffered substantial losses. 

Ripple Labs’ chief legal executive Stephen Alderoty reacted to Terraform Labs’ settlement revelation on Wednesday, June 12, indicating that the SEC was busy with press efforts. 

Alderoty indicated that the SEC was touting a massive penalty, with the regulator likely to become a creditor, as witnessed in BlockFi’s bankruptcy proceedings. The lead attorney terms the SEC as a show regulator that is pursuing headlines rather than good crypto policies. 

The lawsuit against Ripple dates back to late 2020, when the securities regulator accused Ripple Labs and its co-founders of offering unregistered securities. The lawsuit featured the firm’s co-founders, Christian Larsen and Garlinghouse, as defendants.

The lawsuit has hindered XRP from the crypto rally for a token that ranks third largest, trailing Bitcoin and Ethereum with a market value of $20.7M.

The XRP market has only raised to $26 billion barely enough to stop other crypto assets from dethroning it from the top three. The XRP trails Solana, USDC, BNB, USDT, and Lido Staked that, have kept third-place away. 

SEC Responds to Ripple’s Lower Penalty Request

The Gensler-led SEC responded to Ripple Labs’ request for a lower penalty. Ripple suggests a reasonable amount not exceeding $10 million by contrasting the Terraform Labs settlement to challenge nearly $2 billion.

📰 Also read:  Major Bitcoin Price Swings Might Happen In July As Traders Focus On US Economy

SEC submitted a response letter to Judge Analisa Torres on Friday, June 14, indicating that Terraform Labs agreed to burn keys for the entire crypto asset securities. The letter added that substantial proceeds would be allocated to the investors besides replacing two board members charged for orchestrating the violations. 

The SEC emphasized that Ripple Labs hardly agrees to such relief. The SEC tore into the comparison of Terraform’s penalty relative to gross sales to urge a similar 1.27% ratio.

The regulator disputes this apples-to-apples comparison as it fails to extend it to gross profit from the violative conduct. A comparison of the $420M civil penalty relative to the profit would yield 11.7%, a significant ratio unlike Ripple’s argument. 

Editorial credit: Muhammad Alimaki / Shutterstock.com


Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.

📰 Also read:  CoinRoutes CEO Blasts United States Regulation, Criticizes SEC’s Cryptocurrency Position

Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Skip to content