After the recent filing by the SEC in the ongoing Ripple case, members of the XRP community are speculating that a settlement may be on the horizon this summer.
In response to Ripple’s supplemental authority letter regarding the Consent Judgment in the SEC v. TerraForm Labs (TFL) lawsuit, the U.S. Securities and Exchange Commission (SEC) has submitted its official response.
Ripple had initially filed the letter on June 13 to strengthen its opposition to the SEC’s demand for $2 billion in remedies. The TFL Consent Judgment required the defendant to settle the lawsuit by paying over $3.58 billion in disgorgement and a civil penalty of $420 million.
Ripple argued that the civil penalty represented only 1.27% of TFL’s gross sales of $33 billion and was significantly less than what the SEC had requested. The company also highlighted that unlike the TFL case, there was no evidence of fraud in their situation despite the judge uncovering fraudulent schemes that resulted in losses exceeding $40 billion.
In its response, the SEC emphasized that the TFL Consent Judgment was a result of a settlement and should not be used as a basis for determining penalties. The SEC pointed out that Ripple failed to acknowledge certain key factors such as TFL’s bankruptcy, destruction of crypto assets, and reimbursement of investor losses when seeking to link the two cases.
The SEC also criticized Ripple’s representation of the penalty ratio, highlighting that comparing TFL’s civil penalty to gross profit rather than gross sales would result in a higher percentage. The SEC argued that applying this ratio to Ripple’s gross profits would result in a much larger penalty than what the defendant was proposing.
Following the SEC’s response, members of the XRP community are now speculating that a settlement between the SEC and Ripple could be reached this summer. Abdullah “Abs” Nassif, host of the Good Morning Crypto podcast, conducted a poll showing that a majority of voters believe a settlement is likely to happen.
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