The ongoing legal dispute between Ripple Labs and the US Securities and Exchange Commission (SEC) has seen a new development, with the regulatory body providing a decisive response to Ripple.
This comes after Ripple previously accused the authority of demanding unreasonable settlement fees, citing the Terraform Labs case as an example.
Details of the legal response:
In its response, the SEC indicated that Ripple compared the fine imposed by the Commission to the fine imposed in the Terraform Labs case, which witnessed significant financial losses to users as a result of the collapse of its ecosystem.
Although users in the case of Ripple did not suffer similar losses, the authority demanded a higher financial settlement.
The SEC has asked the court to approve a $2 billion settlement resulting from a securities law violation when Ripple sold XRP to institutional investors.
On the other hand, Ripple opposes this proposed fine, stating that it should not pay more than $10 million.
In response, the regulator clarified that settlement fees are typically determined on a case-by-case basis, and that the average settlement rate from sales proceeds is 1.27%.
The authority noted that Terraform's fees were lower due to other important considerations.
The authority explained that Terraform Labs was in bankruptcy and did not have enough liquidity to pay the higher fine.
It also noted that Terraform Labs agreed to stop the actions that led to the violations, while Ripple continued with the same actions that led to the lawsuit in the first place.
While the final decision on compensation is still pending, Ripple has continued to expand its business by modernizing its business and collaborating with Archax.
The bottom line is that when the ruling is issued, it may have a significant impact on other SEC-related cases that may require settlement.
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