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In a new move in the US District Court for the Southern District of New York, Ripple’s legal team has filed a notice of supplemental authority. In it, the company alleges the “irrationality” of the civil penalty requested by the United States Securities and Exchange Commission (SEC). The filing was made on June 13, coinciding with Terraform Labs’ settlement with the SEC for $4.47 billion.

Ripple defense attorney James Filan shared a copy of the lawsuit on X (formerly Twitter). In the document, Ripple’s lawyers argued that the civil penalty the SEC requested, of around $2 billion, is disproportionate.

Furthermore, Ripple argues that the penalty should not exceed US$10 million, citing precedents from similar cases.

“As Ripple’s opposition explained, in comparable (and even more egregious) cases, the SEC has agreed to civil penalties ranging from 0.6% to 1.8% of the defendant’s gross receipts,” Ripple’s lawyers stated in the filing. .

Caso SEC x Ripple

Ripple’s lawyers asked the court to consider the recent Terraform Labs deal as an appropriate precedent. In the settlement, Terraform settled a lawsuit with the SEC for $4.47 billion.

“The Terraform settlement therefore confirms that the Court should reject the SEC’s disproportionate and unprecedented request and that an appropriate civil penalty would be no more than $10 million,” the lawyers said.

The legal battle between the SEC and Ripple began in December 2020 when the SEC accused the company of using its XRP token as an unregistered security to raise funds. The case became one of the crypto industry’s longest-running legal disputes.

The dispute culminated in a significant legal precedent in July 2023. At that time, judge Analisa Torres ruled that the XRP token was not a security in relation to programmatic sales on exchanges.

In October 2023, the SEC decided to close its case against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen. So, the regulator chose to discuss solutions with the company. Judge Torres rejected the SEC’s motion and suspended the proceedings, with no date set for resumption.

The US district court’s ruling on the civil penalty for Ripple could set a new standard for future cases involving digital assets and the SEC. Ripple’s legal representatives argue that Terraform “fits the pattern” and that the SEC is seeking a civil penalty that exceeds the range based on Terraform’s settlement, despite the lack of fraud allegations against Ripple.

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