The US Securities and Exchange Commission (SEC) has denied Ripple’s effort to utilize the Terraform Labs settlement as a means to challenge a proposed $2 billion penalty.
The regulator considered the comparison to be invalid because there were substantial disparities between the cases. Ripple contended that the SEC’s request for a $2 billion fine is excessive.
They pointed out that Terraform Labs, despite having $33 billion in sales and being responsible for fraudulent actions resulting in over $40 billion in losses, only faced a penalty of 1.27%.
The SEC denounced Ripple’s utilization of improper analogies and incorrect computations, contending that drawing a parallel between Ripple’s circumstances and Terraform Labs is unfounded due to the fact that Terraform Labs is insolvent and has consented to substantial penalties, unlike Ripple.
The SEC emphasized numerous notable distinctions between the two cases, including the cessation of operations by Terraform Labs, the deliberate destruction of keys to all its crypto asset securities, the acceptance of considerable compensation to investors, and the removal of two board members implicated in the violations. Ripple has declined to accept any such measures.
Furthermore, the SEC stressed the need for greater sanctions for affluent defendants such as Ripple, taking into account their gross profit. By applying Terraform’s penalty ratio to Ripple’s $876.3 million in gross earnings, the calculated penalty would amount to $102.6 million, which is far higher than the $10 million requested by Ripple.
Yesterday, Ripple Labs Inc. has submitted a fresh notification to the Southern District of New York with the intention of swaying the court’s perspective on the SEC’s suggested sanctions and ultimate ruling.
