The SEC responded to a recent request from Ripple lawyers, who called the $2 billion fine requested by the regulator unfair. Lawyers proposed a payment of $10 million, calling it more reasonable. However, in a letter to District Judge Analisa Torres, the SEC explained that $10 million was too small an amount that “would not meet the intent of the civil penalties laws.”
Ripple refers to a settlement agreement with Terraform Labs, under which the company and its co-founder Do Kwon are required to pay the SEC $4.47 billion. According to lawyers, the fine for Terraform will be about 1.27% of the company's gross sales revenue of $33 billion. Ripple insists that the court set a fine for it in the same ratio. However, the company does not take into account that Terraform is in bankruptcy and is “going out of business forever,” the SEC countered.
The regulator explained that Terraform agreed to destroy the keys to all of its “securities”, return significant amounts to investors who invested in these securities, and remove two board members under whom the violations occurred. Ripple does not agree to any concessions, the department explains.
“Even if there is a shortage of funds, defendant Terraform Labs is ready to return the money to the victims and has voluntarily agreed to cease its illegal actions. Therefore, a ruling against Terraform Labs will be of no use in punishing or deterring the undeniably wealthy Ripple defendant, who defies securities laws. He continues to enrich himself by committing the actions that led to the violations in the first place,” the SEC explained.
Recently, Ripple CEO Brad Garlinghouse suggested that Judge Analisa Torres could issue a final verdict in the SEC's lawsuit against Ripple as early as September this year.
