The legal battle between Ripple and the Securities and Exchange Commission (SEC) is getting heated and, after recent developments, seems far from over. This is because both parties do not agree on the right solution Ripple’s violation of securities laws.
Ripple is proposing a $10 million fine instead
Unlike the SEC’s motion for remedies and the issuance of a final judgment, Ripple has done so suggested that the court may not impose a civil penalty not to exceed $10 million. This figure is a far cry from the SEC’s proposed assessment. The Commission had done that before asked the court will order Ripple to pay an amount of $1,950,768,364 as a fine for violations relating to its institutional XRP sales.
Specifically, the SEC proposed that Ripple a civil penalty of $876,308,712 in addition to prejudgment interest of $198,150,940 and disgorgement of $876,308,712, representing the gain from the violation of the Securities Act. However, Ripple asked the court to reject the requests eject and prejudgment interest and focus only on the civil penalty, which may not exceed $10 million.
Ripple’s lawyers also made arguments as to why the civil penalty may not exceed $10 million. First, they stated that the first level of statutory maximum penalties apply to this case “because the SEC has never alleged fraud, deception or manipulation and has failed in its late attempt to show that Ripple recklessly ignored the law.”
Therefore, Ripple argued that the Commission’s request for a civil penalty of over $876 million is not the appropriate remedy for the first-line structure. They added that the company’s revenue from institutional sales prior to the complaint should be the only revenue considered when deciding on a resolution, making 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 income while deciding on the correct amount for which the crypto company should be fined. According to the company’s lawyers, the Commission failed to “analyze or even consider other categories of Ripple’s expenses.”
Meanwhile, they claim that the SEC has not offered any evidence or explanation “for why expenses as income are Ripple’s only category of deductible expenses.” Simply put, Ripple argues that the regulator failed to take into account how much the company spent when calculating Ripple’s revenue before deciding that nearly $2 billion was an appropriate fine.
Ripple’s lawyers made this argument, while arguing that the SEC also erred by relying on the testimony of Andrea Fox, an accountant at the agency. They claim the SEC never exposed Fox as a fact expert witness and that she was not deposed during the initial discovery or additional discovery discover remedies. That is why they decided to classify her statement as a ‘lately published expert report’.
Ripple also opposes SEC’s proposed ban
As part of its final ruling, the SEC had asked the court to “permanently” restrain and prohibit Ripple from “directly or indirectly engaging in an unregistered offering of institutional sales.” Understand how this could affect them ODL transactionsRipple has asked the court to deny the request for an injunction.
The crypto company states that the Commission has failed to demonstrate why an injunction is justified. Orders are typically issued when there is fear of future violations. Ripple claims the SEC has failed to demonstrate a “reasonable likelihood of future violations.”
The crypto company’s lawyers further revealed that Ripple has “changed the way it sells XRP and changed its contracts to prevent future violations.” To show good faith, they have filed a statement by Ripple President Monica Longdescribing the steps the company has taken to prevent future violations.
XRP price recovers above $0.54 | Source: XRPUSDT on Tradingview.com
Featured image from Coinpedia, chart from Tradingview.com
Disclaimer: The article is for educational purposes only. It does not represent NewsBTC’s views on buying, selling or holding investments and of course investing involves risks. You are advised to conduct your own research before making any investment decisions. Use the information on this website entirely at your own risk.