The company’s lawyer says a $10 million fine is appropriate

TL;DR

Ripple claims that the $2 billion penalty proposed by the SEC is excessive, suggesting a fine of no more than $10 million. The company’s CEO expects a resolution by the summer of 2024, although the complex legal process could cause delays.

Ripple arguments

The legal dispute between Ripple and the United States Securities and Exchange Commission (SEC) has been ongoing for more than three years, recently entering its trial phase. The lawsuit revolves around the regulator’s allegations that the company and some of its executives conducted an unregistered securities offering by selling its XRP token.

Earlier this year, the SEC sought a $2 billion penalty from the company alleging the aforementioned violations. Ripple did not welcome the idea, with chief legal officer Stuart Alderoty arguing that the fine should not exceed $10 million.

More recently, the company’s lawyers doubled down on the request, comparing the case to that of the Commission and Terraform Labs. Recall that the defunct crypto company agreed to pay a $4.47 billion fine for its fraudulent activity. The amount includes $3.6 billion in disgorgement, $466 million in prejudgment interest and a $420 million civil penalty.

The defense said the SEC has previously agreed that civil penalties should range from 0.6 percent to 1.8 percent of the defendant’s gross revenue, alleging that Terraform Labs “is fits this pattern.” As such, the lawyers concluded that an “appropriate” fine for Ripple would be no more than $10 million.

In addition, the attorneys noted that a Manhattan jury found Terraform Labs and its co-founder Do Kwon civilly liable for “recklessly orchestrating one of the largest securities frauds” in U.S. history. Instead, they added, there are no direct allegations of fraud in the case between Ripple and the SEC.

Is the lawsuit close to a resolution?

Despite being in the trial phase, the legal battle can drag on for years due to the complexity of the process and the potential delays and resources of both parties. According to Ripple CEO Brad Garlinghouse, however, the resolution could happen as soon as this summer.

“My estimate is before the end of summer. Someone asked me about the end of August, but I pointed out that September 21 is the end of summer,” he said recently.

Another person who believes the case may officially end in the coming months is US Attorney Jeremy Hogan. He predicted a $100 million deal:

“I’m saying the judge will order 0 dumping, but throw the SEC a bone and order Ripple to pay a $100 million fine.”

Some might see the SEC as the underdog in the suit, given the company’s three partial court victories secured throughout 2023. XRP’s price reacted positively after each triumph, meaning a decisive victory may cause a substantial upswing again. Those who want to learn more about the legal battle and its impact on Ripple’s native token, feel free to check out our dedicated video below:

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