In a recent development in the cryptocurrency sector, the US Securities and Exchange Commission (SEC) firmly refuted an attempt by Ripple to lessen a proposed fine, arguing that it is not comparable to the Terraform Labs case, which involved a significantly smaller sanction.
According to the SEC, the circumstances of the Terraform case, which included the company’s bankruptcy and investor restitution agreements, differ substantially from those of Ripple, which remains operational and profitable.
Ripple, which has faced a lawsuit since 2020 for using XRP as an unregistered security, suggested that the $2 billion fine imposed by the SEC was exorbitant, especially when compared to the $33 billion in fraudulent Terraform sales that resulted at a penalty of just 1.27% of the total. “Requiring such a large fine is disproportionate,” Ripple said, pointing to the precedent set in the Terraform case.
The SEC, however, highlighted that the differences between the cases are notable. While Terraform Labs agreed to severe operational and financial restrictions after declaring bankruptcy, Ripple did not accept comparable measures. “Comparing penalties across cases is not valid given the discrepancies in the two companies’ actions,” said an SEC representative. Furthermore, it was highlighted that Ripple neglected to consider gross profit in its comparison, which, according to SEC calculations, would increase the fine to US$102.6 million, based on Ripple’s profits, and not the proposed US$10 million for them.
In 2020, judge Analisa Torres partially recognized Ripple’s claims, considering XRP a security only in direct transactions with institutional investors, but not in programmatic sales. Since then, the dispute between Ripple and SEC has intensified, with heated arguments over the proportion and fairness of the penalties.
The SEC emphasizes that the proposed fine reflects not only the severity of the violations but also Ripple’s financial capacity, something that, according to them, does not compare to the situation with Terraform Labs. The legal battle between Ripple and the SEC continues, highlighting the complexities of cryptocurrency regulation and the consequences for the broader market.
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Source: https://portalcripto.com.br/sec-rejeita-comparativo-da-ripple-com-terraform-labs-em-disputa-sobre-multas/
