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A latest submitting within the US District court docket for the Southern District of New York reveals that Ripple’s authorized group has submitted a discover of supplemental authority, alleging the “unreasonableness” of the SEC’s requested civil penalty.
The submitting was made on June 13, the identical day that Terraform Labs settled a lawsuit with the SEC for $4.47 billion. Ripple’s legal professionals have requested the court docket to contemplate an “applicable” civil penalty, given the precedent proven within the Terraform Labs settlement. Ripple’s protection lawyer James Filan shared a PDF copy of the submitting on X.
The SEC had requested that Ripple pay roughly $2 billion in disgorgement, prejudgement curiosity, and civil penalties. In response, the blockchain agency has argued for a penalty cap of not more than $10 million. Ripple’s legal professionals have made comparable arguments concerning penalties imposed within the SEC’s respective circumstances in opposition to Block.one, Telegram, and Genesis International Capital. Notably, this line of argument falls to suspicion as a result of Ripple’s submitting redacted crucial info which ought to present context for judgment primarily based on the agency’s income numbers.
“As Ripple’s opposition defined, in comparable (and even in additional egregious) circumstances, the SEC has agreed to civil penalties starting from 0.6% to 1.8% of the defendant’s gross revenues,” said Ripple’s legal professionals within the submitting.
Ripple’s authorized representatives additionally argue that Terraform “matches the sample” and that, against this, the SEC is looking for a civil penalty that exceeds the vary primarily based on Terraform’s settlement, regardless of the dearth of allegations of fraud on its half.
“Terraform thus confirms that the Court docket ought to reject the SEC’s disproportionate and unprecedented request and that an applicable civil penalty could be not more than $10 million,” the legal professionals mentioned.
The SEC’s case in opposition to Ripple started in December 2020, when the regulator alleged that the blockchain agency used its XRP token as an unregistered safety to boost funds. The case has change into one of many crypto business’s longest-running authorized battles, resulting in a big authorized precedent in July 2023 when Choose Analisa Torres dominated that the XRP token was not a safety concerning programmatic gross sales on exchanges.
In October 2023, the SEC moved to dismiss its case in opposition to Ripple CEO Brad Garlinghouse and govt chair Chris Larsen, stating that it deliberate to debate treatments with the blockchain agency. Choose Torres later rejected the SEC’s movement.
Though Choose Torres had initially scheduled the trial between Ripple and the SEC to start in April, she adjourned the continuing in October 2023 with no appointed date for resumption. As of the time of publication, it stays unclear when the choose might set a brand new date for the trial.
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