The SEC firmly opposes Ripple’s lowering of fines: the amount is insufficient to achieve the punishment effect

The U.S. Securities and Exchange Commission (SEC) has strongly opposed Ripple Labs’ latest request for a lower fine, believing that such a fine amount is not enough to achieve the desired punishment.

Ripple’s request for lower fines encounters obstacles

• Citation Terraform Labs case

Last week, Ripple cited the SEC and Terraform Labs The settlement agreement again asked New York District Court Judge Analisa Torres that the fine should not exceed $10 million, which is far lower than the $876.3 million civil penalty proposed by the regulator.

• SEC’s rebuttal

However, the SEC countered in a June 14 letter to Judge Torres that it and Terraform and its The $4.5 billion settlement reached by founder Do Kwon included $420 million in civil penalties, largely because the company went bankrupt, agreed to return funds to investors and fired the "leaders responsible when the violations occurred." people".

SEC stated: "Ripple does not agree with these relief measures. In fact, Ripple does not agree with anything.

Impossible proportion of fines

• The SEC’s explanation

The SEC added that Ripple’s assertion that Terraform’s $420 million civil penalty amounted to “1.27% of its $33 billion in total sales” was not a “ Comparable data".

• SEC calculation method: using the proceeds from the violation

The regulator pointed out that the basis for its measurement of Terraform's fine is "the total profit from the violation" ”, approximately US$3.5 billion, and the fine ratio is close to 12%.

• The comparison of Ripple’s fine is simply too little

# The SEC believes that if the same proportion was applied to Ripple’s total profit of $876.3 million, the fine would be to $102.6 million. "Such a low fine would defeat the purpose of the civil monetary penalty statute," the SEC said.

SEC proposes higher fines

• SEC proposed fines

SEC’s proposed fines against Ripple total nearly 20 billion, including $198.2 million in prejudgment interest, $876.3 million in civil penalties and another $876.3 million in clawbacks.

• Legal disputes have been raging since 2020

Ripple and the SEC have been fighting in court since 2020, after the SEC accused Ripple Unregistered securities were sold, and Judge Torres agreed that the sales were only to institutional investors.

• Controversy over Financial Transparency
  

Last month, the SEC opposed Ripple’s request to seal some of its financial data, arguing that the company should disclose the revenue it received from XRP sales, as Judge Torres determined that the sales were unregistered securities.

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