SEC and Ripple Continue Legal Battle Over Penalties

According to Blockworks, the ongoing legal battle between the Securities and Exchange Commission (SEC) and Ripple is yet to reach a final judgment. The case, which was initiated in 2020, sees the SEC seeking nearly $2 billion in a final judgment. Ripple, however, has contested this amount, arguing that it is excessively high. The company has requested the court to reduce the penalty to a maximum of $10 million. The SEC, in its latest filing, disagreed with Ripple's proposal. The regulator argued that Ripple failed to demonstrate how such a minimal penalty would effectively punish its violations or deter it or others from future large-scale capital raises without the required registration. The SEC maintains that the $1.9 billion it is seeking is insignificant compared to the $1 billion Ripple made by violating Section 5 of the Securities Act and the multi-billion-dollar business it built selling XRP. Ripple, in contrast, argues that the multi-million dollar sum is fair when compared to other crypto cases such as BlockFi, Genesis Global, and Block.one. The SEC, however, dismissed this argument, stating that the cited cases were merely settlements. The SEC further stated that Ripple has failed to prove that the SEC's calculation is not a reasonable approximation of Ripple's ill-gotten gains. Ripple's Chief Legal Officer, Stuart Alderoty, commented that the filing was more of the same from the SEC. He expressed optimism that the lawsuit would soon be resolved, but also acknowledged that many are just beginning their journey. He expressed trust that the court would approach the remedies phase fairly. The filings suggest that a final judgment is imminent, but it remains unclear what the court will decide given the two radically different proposals.