Stuart Alderoty, Ripple’s Chief Legal Officer, has drawn attention to the SEC’s recent action in the Ripple case, noting that the regulator appears to have dropped its demand for nearly $2Billion. In an X post over the weekend, Alderoty emphasized that the securities regulator has abandoned its “absurd” $2 billion request.
On March 22, the SEC initially requested nearly $2Billion in fines from Ripple for alleged violations of federal securities laws through unregistered sales of XRP to institutional investors. This fine comprised a $876.3 million civil penalty, $876.3 million disgorgement, and $198.15 million in prejudgment interest, totaling $1.95 billion.
Ripple’s Counterargument Leveraging TFL Case
Ripple opposed this demand and recently used the Consent Judgment in the TerraForm Labs (TFL) case to argue for a significantly lower penalty of $10 million instead of the SEC’s proposed $2 billion. In the TFL lawsuit, the defendants agreed to pay over $4 billion, including a $420 million civil penalty and a $3.587 billion disgorgement.
Related article: Ripple v SEC: Can They Reach a Settlement This Summer?
Ripple argued that TFL’s civil penalty was 1.27% of the company’s $33 billion gross sales, a much lower figure than what the SEC demanded in Ripple’s case. In response, the SEC disputed Ripple’s claims about TFL’s fine. It contended that the ratio between $420 million and $3.587 billion in the TFL lawsuit amounted to 11.7%.
Applying this 11.7% ratio to the $876.3 million disgorgement, the SEC suggested Ripple could pay a $102.6 million civil penalty. This would reduce the SEC’s demand from nearly $2 billion to $1.17 billion. The new total includes $876.3 million in disgorgement, $198.15 million in prejudgment interest, and a $102.6 million civil penalty.
Related article: Ripple v. SEC: The Key Factor Delaying Final Judgment
Alderoty Addresses SEC’s Other Arguments
Alderoty also addressed other arguments in the SEC’s latest brief. He pointed out that Ripple defended itself without agreeing to any of the SEC’s accusations. Moreover, he highlighted that the court provided clarity on XRP, declaring the coin a non-security.
He noted there were no victims in the Ripple case needing compensation and suggested Ripple continues to thrive despite the prolonged legal battle. Ripple CEO Brad Garlinghouse estimated the court’s final verdict could be issued before the end of summer 2024.
In the meantime, Ripple remains engaged in the legal process, anticipating the outcome that could shape the future of its operations.
