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 Securities and Exchange Commission’s suggested sanctions and ultimate ruling.
Ripple’s legal team, headed by Michael K. Kellogg, cite a parallel lawsuit involving Terraform Labs, in which Terraform and CEO Do Hyeong Kwon were convicted of significant securities fraud.
Terraform was mandated by the court to make a payment of $3.59 billion as disgorgement, along with a civil penalty of $420 million.
This penalty amounts to approximately 1.27% of their total revenues, which stood at $33 billion. Ripple contends that the fines imposed in their case are disproportionately severe when compared to the Terraform case.
This is because the Securities and Exchange Commission (SEC) dealt with Terraform’s case including fraud and substantial losses for investors, whereas Ripple is not accused of any fraudulent activities. Ripple provides examples of other instances where penalties ranged from 0.6% to 1.8% of total profits.
Ripple seeks to demonstrate disparities in the SEC’s sanctions by juxtaposing their case with that of Terraform, advocating for equitable treatment and a more rational monetary penalty.
Their proposition entails a penalty limit of $10 million, well below the SEC’s recommended $2 billion fine for the sale of XRP to institutional investors.
A few days ago, Ripple, has initiated the XRPL Japan and Korea Fund with the intention of fostering blockchain innovation in the countries of Japan and South Korea.
