In the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), Ripple’s lawyers have made a new move. They are urging the court to levy an “appropriate” civil penalty against the blockchain firm, spotlighting a comparable recent case. This legal struggle, which began in December of 2020, saw the SEC accusing Ripple of conducting an unregistered securities offering worth $1.3 billion through its XRP token sales.
Ripple’s reference to the settlement between the SEC and Terraform Labs is strategic and pivotal. In that case, the co-founder of Terraform Labs was found liable by a jury for fraudulent activity. Ripple’s legal team pointed to this decision to argue for what they deem a reasonable penalty, suggesting a figure no greater than $10 million. Contrastingly, the SEC has suggested a steep penalty for Ripple, proposing disgorgement and civil penalties that could cumulatively amount to approximately $2 billion.
In a significant development within the case, Judge Analisa Torres made a ruling in July 2023, determining that XRP was not a security in relation to its programmatic sales on exchanges. This decision marked a notable legal precedent, potentially impacting how digital assets are perceived and regulated in the future.
Additionally, the SEC decided to withdraw its case against Ripple’s top executives, CEO Brad Garlinghouse and executive chair Chris Larsen. This move indicated that the SEC may be open to discussions regarding remedies with Ripple, potentially signaling a shift towards a resolution.
Originally, the trial was slated to commence in April. However, it was adjourned in October and currently remains without a scheduled date to resume. This adjournment prolongs the uncertainty surrounding the outcome of the case and what it could mean for the broader cryptocurrency market.
As the legal tussle drags on, Ripple’s defense emphasizes fairness and proportionality in the penalties to be imposed, reflecting a broader industry call for clarity in the regulatory landscape for cryptocurrencies. The outcome of this high-profile case will likely set an important and enduring legal standard for digital asset companies operating within the United-States’ jurisdiction. It remains to be seen how the court will navigate between Ripple’s plea for a modest penalty and the SEC’s push for a heftier punitive measure.
