The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has taken a new turn. Ripple previously criticized the SEC for demanding exorbitant settlement fees, highlighting a discrepancy compared to the Terraform Labs case.
The SEC accused Ripple of violating securities laws by selling XRP to institutional investors, proposing a $2 billion settlement. Ripple contested this, arguing that they should not be required to pay more than $10 million, especially since no users experienced losses akin to the Terraform ecosystem collapse.
In its latest response, the SEC maintained that settlement fees are typically determined on a case-by-case basis. The average settlement rate is 1.27% of sales proceeds, but the SEC explained that the Terraform penalty was lower due to significant mitigating factors.
Read more Ripple Cites TerraForm Labs Settlement to Challenge SEC Penalties
For instance, the SEC considered Terraform Labs’ bankruptcy and its insufficient liquidity to pay a higher fine. Additionally, Terraform Labs agreed to cease the activities that led to the violations, whereas Ripple Labs continued similar practices, prompting the lawsuit.
The final decision on appropriate remedies remains pending in court. Ripple Labs’ supplemental notice aims to present additional evidence, but the court’s ruling could significantly impact other SEC-related cases requiring settlements. Meanwhile, Ripple Labs continues to expand its business operations.
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