Ripple believes the penalty imposed on them is excessive, despite there being no accusations of fraud involved in the matter.

Ripple Labs argues that the numbers aren’t adding up in their court battle with the SEC. They point to a recent $4.5 billion settlement as proof that their proposed penalty should be lowered to $10 million instead of the initially proposed $2 billion. According to court documents, there were fines of $20.73 million in disgorgement, $198 million in prejudgment interest, and an additional $876 million civil penalty. Ripple has stated that it has new evidence to support a lower penalty. In the Terraform Labs case, a reported $40 billion investor loss resulted in a $3.6 billion disgorgement and $420 million in civil penalties, totaling over $4 billion. Ripple’s letter notes that the civil penalty of $876 million represents about 1.27% of the defendants’ $33 billion gross sales. Furthermore, it was mentioned that in different instances, the SEC has agreed to impose civil penalties that fall within the range of 0.6% to 1.8% of the defendant’s gross revenues. In the Ripple case, the company’s lawyers argued that the SEC is seeking a civil penalty that is well beyond what is typically seen in similar cases, despite the absence of fraud allegations or significant losses by institutional buyers. Ripple’s chief legal officer, Stephen Alderoty, suggested that the SEC is more focused on gaining publicity for its enforcement actions, and pointed out that in other cases such as Terraform Labs, the SEC may end up being just another creditor in bankruptcy court despite imposing large penalties. The SEC is now more focused on garnering attention through flashy regulations rather than implementing effective policies. The legal battle between Ripple and the SEC began in late 2020 when XRP was accused of being an unregistered security. Despite XRP’s market cap increasing from $20.7 billion to $26 billion, the cryptocurrency has been surpassed by other assets in the top three rankings. As of now, it ranks as the eighth largest asset, with Tether, BNB, Solana, Lido Staked Ether, and USDC shifting positions between it and the top two. This information was provided in the Daily Debrief Newsletter. Begin each day with the most current news headlines, as well as exclusive articles, a podcast, videos, and additional content delivered straight to your inbox.