Breaking: Ripple Files Opposition, Agrees to Pay $10M In Penalty To US SEC

full version at coingape

Ripple Labs has filed its opposition to the United States Securities and Exchange Commission’s (SEC) motion for remedies and entry of final judgment, denying the $876,308,712 in disgorgement and $198,150,940 in prejudgment interest requested by the SEC. However, Ripple agrees to pay a maximum penalty of $10 million instead of a $876,308,712 civil penalty sought by the SEC.

US SEC v. Ripple Lawsuit Gets Complex

In a court filing on April 22, Ripple disagreed with arguments and fines presented by the U.S. SEC in its remedies-related briefing. Ripple agreed to pay civil penalties as the court ruled that the company violated Section 5 of the Securities Act of 1933 as it offered XRP under institutional investment contracts.

Notably, Ripple presented three arguments:

The SEC has failed to establish a likelihood of violations in the future and reckless disregard for the law in institutional sales by Ripple.
Govil bars disgorgement because the SEC cannot show pecuniary harm and Ripple’s legitimate business expenses be deducted from any disgorgement.
Civil penalty should not exceed $10 millions based on the SEC’s weak arguments and fines in other digital asset cases.

Ripple told the court that the company has changed the way it sells XRP, obtained licenses to sell XRP outside the U.S., and changed its contracts to avoid issues, as per the court’s direction. However, Ripple disagreed with the SEC’s remedial requests, an evidence of administrative overreach, to issue an injection based on mere speculation that Ripple may break the laws in the future.

Along with its opposition brief, Ripple also filled supporting declarations and exhibits on proof of the company’s compliance and licenses to sell XRP in other jurisdictions.

Also Read: Ripple v SEC News – Lawyers Reveal Appeal, Settlement, Fine Aspects in XRP Lawsuit

Ripple CLO Stuart Alderoty on the SEC’s Flawed Filing

U.S. SEC seeks final judgment against Ripple to pay $876,308,712 in disgorgement, $198,150,940 in prejudgment interest, and $876,308,712 civil penalty.

Ripple CLO Stuart Alderoty claims the SEC’s case had no allegations or finding of recklessness or fraud, remaining confident that Judge Torres will proceed and rule this final remedies phase fairly.

“Our opposition to the SEC’s request for $2B in penalties for legacy institutional sales is now public. In a case that had no allegations (or findings) of recklessness or fraud, and in which Ripple won on significant issues, the SEC’s ask is just more evidence of its ongoing intimidation against all of crypto in the U.S.,” he said.

Feels apropos that we file our response on the same day that 2 SEC lawyers “resign” for their (mis)conduct in the Debt Box case…

The US will be picking up the pieces of the agency’s disastrous policies long after Gensler is gone. https://t.co/vQMHKG5kbW

— Brad Garlinghouse (@bgarlinghouse) April 23, 2024