The SEC criticized Ripple Labs’ recent argument for a lower penalty, arguing that it would not be enough.
Last week, Ripple cited the SEC’s settlement with Terraform Labs when it again asked New York District Court Judge Analisa Torres on June 13 to impose a fine of ” a maximum of $10 million” – far less than the civil penalty proposed by the SEC. , which amounts to $876.3 million.
A day later, the SEC argued in a June 14 letter to Judge Torres that its $4.5 billion settlement with Terraform and its co-founder Do Kwon – including a $420 million civil penalty – had been entered into because the company was bankrupt. She agreed to return the money. to the company. Investors and managers fired “responsible at the time of the violations”.
“Ripple has not agreed to any of these relief measures – in fact, Ripple has not agreed to any of these measures.”
Ripple’s argument that the $420 million civil penalty imposed on Terraform represented approximately 1.27% of its “total sales of $33 billion” was not a “full comparison,” the SEC said.
The SEC added that it measured Terraform’s penalty against the “gross profit from the illicit conduct,” which it pegged at more than $3.5 billion, or about 12 percent.
The regulator argued that Ripple’s civil penalty would be $102.6 million if the same percentage was applied to the $876.3 million of Ripple’s total profits that it requested to be divested.
“A reduced penalty would not meet the objectives of the civil penalty laws,” the SEC said.
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The SEC’s proposed penalties for Ripple total approximately $2 billion, including $198.2 million in prejudgment interest, $876.3 million in civil penalties, and an additional $876.3 million for default. payment.
The two have been in their legal battle since 2020 after the SEC said Ripple sold unregistered securities, which Judge Torres agreed to do – but only when they were sold to institutional investors.
Last month, the Securities and Exchange Commission challenged Ripple’s attempt to shut down some of its finances, with the regulator arguing that the company should disclose revenue it generated from sales of XRP (XRP), which the Judge Torres, were not recorded.
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