O legal battle Between Ripple and the Securities and Exchange Commission (SEC) it’s heating up, and going by recent developments, it seems far from over. This is due to disagreement between both parties on the appropriate solution to Ripple’s Violation of Securities Laws.
Ripple proposes $10 million fine
In opposition to the SEC’s motion for remedies and final decision, Ripple proposed that the court should not impose a civil penalty not exceeding $10 million. This number represents a far cry from the judgment proposed by the SEC. The Commission had previously asked the court to order Ripple to pay the sum of US$1,950,768,364 as a monetary fine for violations related to its institutional sales of XRP.
Specifically, the SEC proposed that Ripple pay a fee civil penalty of $876,308,712, along with prejudgment interest of $198,150,940 and disgorgement of $876,308,712, which represents the profits from its violation of the Securities Act. However, Ripple asked the court to deny the requests for restitution and prejudgment interest and focus only on the civil penalty, which must not exceed $10 million.
Ripple’s lawyers also presented arguments as to why the civil penalty should not exceed US$10 million. First, they stated that the first level of maximum legal penalties is what applies in this case “because the SEC never charged fraud, deception or manipulation and failed in its belated attempt to show that Ripple recklessly flouted the law.”
Therefore, Ripple argued that the Commission’s request for a civil fine of more than $876 million is not the appropriate remedy for the first-tier structure. They added that the company’s revenue from pre-complaint institutional sales should be the only profit considered when deciding on a settlement, which makes a civil penalty of no more than $10 million more appropriate.
SEC accounting error
Ripple suggested that the second made a mistake in calculating the company’s profits when deciding the right amount for which the crypto company should be fined. According to the company’s lawyers, the Commission did not “analyze or even consider any other categories of Ripple expenses”.
Meanwhile, they claim that the SEC has offered no evidence or explanation “as to why cost if income is Ripple’s only deductible expense category.” Simply put, Ripple argues that the regulator, in calculating Ripple’s profits, did not consider how much the company spent before deciding that nearly $2 billion was an appropriate fine.
Ripple’s lawyers made this argument by asserting that the SEC also erred in relying on the statement of Andrea Fox, the agency’s accountant. They claim that the SEC never disclosed Fox as fact or Expert and that she was not deposed during initial or supplemental discovery drug discovery. Therefore, they decided to consider his statement as an “untimely released expert report”.
Ripple also opposes proposed SEC injunction
As part of its entry for final judgment, the SEC asked the court to “permanently restrain” and prohibit Ripple from “directly or indirectly engaging in an unregistered institutional sales offering.” Understanding how it might affect them EAD TransactionsRipple asked the court to deny the injunction request.
The crypto firm argues that the Commission has failed to demonstrate why an injunction is justified. Injunctions are generally granted when there is fear of future violations. Curling It states that the SEC failed to demonstrate a “reasonable probability of future violations.”
The crypto firm’s lawyers further revealed that Ripple “has changed the way it sells XRP and amended its contracts to prevent any future violations.” To demonstrate good faith, they presented a statement from the Ripple President Monica Longwhich describes the measures the company has taken to prevent future violations.
XRP price recovers above $0.54 | Source: XRPUSDT on Tradingview.com
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