Crypto News Today- SEC Declines Ripple’s Appeal for a Reduced Penalty

Crypto News Today- SEC Declines Ripple’s Bid for a Reduced Penalty

Crypto News– The United States Securities and Exchange Commission (SEC) has criticized Ripple Labs’ recent plea for a reduced penalty, asserting it falls short of adequacy.

On June 13, Ripple referenced the SEC’s settlement with Terraform Labs as it petitioned Judge Analisa Torres of the United States District Court for the Southern District of New York for a penalty not exceeding $10 million — a stark contrast to the SEC’s proposed $876.3 million civil penalty.

In response, the SEC argued in a letter dated June 14 to Judge Torres that its $4.5 billion settlement with Terraform Labs and its co-founder Do Kwon, which included a $420 million civil penalty, was justified due to the firm’s bankruptcy status. The settlement also mandated the return of investor funds and the removal of leaders responsible for the violations at the time.

Ripple is agreeing to none of this relief — in fact, Ripple is agreeing to nothing.

Do Kwon

The regulator argued that Ripple would face a civil penalty of $102.6 million if the same ratio applied to the $876.3 million in gross profits Ripple was asked to disgorge. The SEC’s proposed penalties for Ripple amount to nearly $2 billion, comprising $198.2 million in prejudgment interest, $876.3 million in civil penalties, and an additional $876.3 million in disgorgement.

Since 2020, the two parties have been embroiled in a legal battle after the SEC accused Ripple of selling unregistered securities. Judge Analisa Torres agreed with this claim in a ruling issued in July 2023, specifying that it applied only to sales made to institutional investors.

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