The SEC’s latest filing in the Ripple case has stirred speculation within the XRP community about a potential settlement this summer. Ripple filed a supplemental authority letter on June 13, opposing the SEC’s demand for $2 billion in remedies. The letter referenced the Consent Judgment in the SEC v. TerraForm Labs (TFL) lawsuit.
In that case, TFL settled by paying $3.58 billion in disgorgement and a $420 million civil penalty. Ripple argued that this penalty was just 1.27% of TFL’s gross sales of $33 billion, highlighting that no fraud was found in Ripple’s case, unlike TFL’s.
SEC’s Response
Defense lawyer James K. Filan shared the SEC’s response on X. The SEC emphasized that the TFL Consent Judgment was a settlement, which holds limited value in determining remedies. Ripple asked the court to consider the TFL settlement in determining its penalty.
However, the SEC argued that Ripple ignored factors such as TFL’s bankruptcy, its agreement to destroy wallet keys holding crypto assets, and the reimbursement of investors’ losses. The SEC remarked that these factors were crucial for court approval of the TFL settlement.
Related article: Ripple and SEC Clash Over Sealing Financial Details of XRP Sales
The SEC pointed out that Ripple did not agree to any similar reliefs as TFL. It argued that the TFL settlement is irrelevant for determining Ripple’s penalties, as Ripple did not acknowledge violating securities laws. Instead, the SEC accused Ripple of continuing to “enrich itself through conduct similar to the original securities law violations.”
Disputing Ripple’s Penalty Comparison
Additionally, the SEC disputed Ripple’s comparison of TFL’s civil penalty to its gross sales. The SEC noted that Ripple should have compared the penalty to TFL’s gross profit of $3.587 billion, making the penalty ratio 11.7%. Applying this ratio to Ripple’s gross profits of $876.3 million would suggest a penalty of $102.6 million, much higher than Ripple’s proposed $10 million cap.
Related article: Ripple v. SEC: The Key Factor Delaying Final Judgment
Following the SEC’s estimation, XRP community members speculated that the case might settle. Abdullah “Abs” Nassif, host of the Good Morning Crypto podcast, noted that the SEC now seeks a settlement of $102.6 million, down from nearly $2 billion.
He conducted a poll asking XRP enthusiasts if they believed a settlement would occur this summer. With 13 hours left, 69.1% of the 780 votes predicted a summer settlement.
The SEC’s response to Ripple’s letter has intensified discussions about a possible settlement, with the community closely watching the developments.
