Ripple SEC Lawsuit: Ripple’s legal battle with the SEC has intensified as prominent XRP lawyer Bill Morgan highlights the regulator’s “strange animus” towards Ripple. Morgan argues that the penalties sought against Ripple starkly contrast with those in other crypto cases, suggesting an unusual bias.
Notably, Ripple’s recent filing in the XRP lawsuit, referencing the TerraForm Labs case, underscores this perceived inconsistency.
SEC Shows Unusual Biasness Towards Ripple
Ripple has once again brought attention to its ongoing conflict with the U.S. Securities and Exchange Commission (SEC). In its latest court filing, the company pointed to the penalties in the TerraForm Labs case to argue against what it sees as disproportionate demands from the SEC.
Notably, pro-XRP lawyer Bill Morgan emphasized that the SEC’s attitude towards Ripple appears unusually harsh. He noted that in the TerraForm Labs case, the SEC requested $4.47 billion in penalties, which included $3.58 billion in disgorgement and $420 million in civil penalties.
This total sum was equivalent to approximately 1.27% of TerraForm’s gross sales of $33 billion. However, Morgan noted that this case involved significant investor losses and fraudulent activities, yet the SEC settled for a penalty within the lower range of what it typically seeks.
Meanwhile, he compared this with the Ripple SEC lawsuit, where the SEC is demanding an $876 million penalty. This figure is about 20 times higher than the penalties in other crypto-related cases, where fines typically range between 0.6% and 1.8% of gross sales. Ripple’s legal team argued that this discrepancy shows an unreasonable and biased approach by the SEC.
Also Read: Ripple and Archax to Bring Tokenized RWA Worth Millions to XRP Ledger
SEC’s Inconsistent Approach
Ripple’s filing suggests that the SEC’s approach in its case has been inconsistent compared to other similar cases. The company drew parallels with the TerraForm Labs settlement, where the SEC’s penalty was significantly lower, despite more severe allegations.
Notably, in the TerraForm case, founder Do Kwon and his company were accused of orchestrating one of the largest securities frauds in U.S. history, causing investors to lose $40 billion. However, the SEC’s settlement request represented a mere fraction of TerraForm’s gross sales.
Ripple highlighted this inconsistency, arguing that the SEC’s demands against it are overly punitive. The company, as well as Bill Morgan, noted that there were no fraud allegations in its case, and institutional buyers did not incur losses, making the hefty penalty sought by the SEC even more confusing.
Meanwhile, Ripple’s latest move involves filing a notice of supplemental authority, citing the TerraForm Labs case to strengthen its position. This filing questions the rationale behind the SEC’s excessive penalty request and suggests that the regulatory body might be treating Ripple with undue severity.
Although the latest turn in the legal fight has caught many eyes in the crypto community, XRP struggled to show any positive momentum. As of writing, XRP price was down 1.4% and exchanged hands at $0.4799, while its trading volume slipped 16% to $1.05 billion.
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