The ongoing legal battle between Ripple Labs and the SEC over XRP sales has taken another turn. The SEC has rejected Ripple’s request for a significantly reduced civil penalty, Cointelegraph said in a report.
In June, Ripple argued for a penalty of “no more than $10 million,” citing the SEC’s recent settlement with Terraform Labs, which included a $420 million civil penalty. However, the SEC countered that this settlement involved a bankrupt company returning funds to investors and removing responsible leadership – actions Ripple hasn’t agreed to.
The SEC further disputed Ripple’s “apples-to-apples comparison” with Terraform’s penalty. They argue their penalty is based on the “gross profit of the violative conduct,” not total sales, which would result in a $102.6 million penalty for Ripple. They maintain this is necessary to fulfill the purpose of civil penalty statutes.
This disagreement adds to the ongoing dispute, which began in 2020 when the SEC accused Ripple of selling unregistered securities. Judge Torres ruled in July 2023 that XRP sales to institutional investors were unregistered securities, but not retail sales.
The SEC previously objected to Ripple sealing some financial records related to XRP sales deemed unregistered.
With both sides holding firm, the court battle over XRP’s classification and Ripple’s potential penalty continues.
