2024-05-09
The recent court filing reveals that the Securities and Exchange Commission (SEC) is resisting Ripple's claim for reduced fines.
The SEC has proposed that Ripple pay nearly $2 billion in fines for its sales to institutional investors.
However, Ripple has argued in its opposition motion that the amount should be significantly lower, around $10 million.
The SEC, in response, has stated that Ripple's proposed penalty would merely be a "slap on the wrist.
" According to the SEC's lawyers, accepting such a minimal penalty would incentivize other crypto asset issuers to violate Section 5 and disregard the required disclosures mandated by Congress.
This, in turn, would harm investors and reduce the seriousness of the penalties.
The legal battle between the SEC and Ripple has been ongoing for years.
The SEC accused Ripple of raising $1.3 billion through the sale of XRP, which it considers an unregistered security.
Judge Analisa Torres of New York ruled last year that Ripple's programmatic sales of XRP did not violate securities laws due to the blind bid process involved.
However, she did classify direct sales of the token to institutional investors as securities.
The SEC has alleged that Ripple generated billions of dollars through institutional sales of XRP.
Ripple claims to have adjusted its sales practices following the New York ruling.
The SEC further criticized Ripple's assurance to the court that it would not violate securities laws in the future.
The SEC's lawyers dismissed Ripple's argument that obtaining licenses from different jurisdictions, which do not treat XRP sales as securities, should exempt the company from adhering to U.S. securities laws.
The SEC likened this argument to a New York restaurant claiming it doesn't need a liquor license because it obtained a fishing license in California.
In response to the SEC's statement, Ripple's Chief Legal Officer, Stuart Alderoty, expressed his disagreement.
He criticized the SEC's lack of respect for financial regulators outside the U.S. who have established comprehensive crypto licensing frameworks, implying that the SEC views their licenses as insignificant.
