Top Lawyer for Ripple Claims SEC Drops 2 Billion Lawsuit

Stuart Alderoty sheds light on the recent actions taken by the SEC in the Ripple case, revealing that the regulatory body seems to have dropped its request for nearly $2 billion.
The Ripple Chief Legal Officer (CLO) shared this information in a post on X, highlighting that the SEC has abandoned its ‘absurd’ demand for $2 billion.
SEC’s Proposal in Ripple Case
Back on March 22, the SEC had asked for almost $2 billion in fines for Ripple’s breach of federal securities laws due to the unregistered sale of XRP to institutional investors. The fine was broken down into a civil penalty of $876.3 million, disgorgement of $876.3 million, and prejudgment interest of $198.15 million, totaling $1.95 billion.
Even though Ripple initially resisted the demand, the cryptocurrency payments company has recently used the Consent Judgment in the TerraForm Labs’ (TFL) case as leverage to argue for a reduced penalty of $10 million instead of the SEC’s proposed $2 billion.
In the TFL lawsuit, the defendants had agreed to pay a fine of over $4 billion, which included a $420 million civil penalty and a $3.587 billion disgorgement.
Therefore, Ripple pointed out that the civil penalty imposed on TFL only accounted for 1.27% of the company’s $33 billion in gross sales, indicating that it was significantly lower than the amount requested by the SEC in their case.
Potential Reduction in SEC’s $2B Demand
However, the SEC challenged Ripple’s comparison of TFL’s fine. They argued that the ratio between the $420 million civil penalty and the $3.587 billion disgorgement demanded in the TFL lawsuit equated to 11.7%. The SEC suggested that using the same 11.7% ratio could result in Ripple paying a civil penalty of $102.6 million based on the $876.3 million disgorgement they are seeking.
This calculation could potentially lower the SEC’s demand from almost $2 billion to $1,177,050,000 ($1.17 billion), which includes $876.3 million in disgorgement, $198.15 million in prejudgment interest, and the newly proposed $102.6 million in civil penalty.
Alderoty Addresses SEC’s Counterarguments
In the meantime, Alderoty responded to some of the arguments presented in the SEC’s latest brief. He emphasized that Ripple had vigorously defended itself, refuting all of the SEC’s allegations.
The Ripple CLO highlighted that the court had provided clarity on XRP, declaring it a non-security. Moreover, Alderoty pointed out that there were no victims in the Ripple case requiring compensation. Lastly, he mentioned that despite the ongoing legal battle, Ripple continues to thrive.
As both parties await the court’s final decision, Ripple CEO Brad Garlinghouse estimated that the verdict could be issued before the end of summer 2024.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The opinions expressed here are those of the author and do not necessarily reflect the views of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not liable for any financial losses incurred.