Ripple Counters SEC's $2 Billion Fine with $10 Million Offer

In its lawsuit over XRP, Ripple objected to the US Securities and Exchange Commission's (SEC) motion for remedies and entry of final judgment. The fintech firm, for its part, is resisting the agency's attempt to extract almost $2 billion in fines and is offering to pay no more than $10 million. Ripple filed its 186-page opposition to the SEC's draconian demands late Monday, laying out its case against the regulator's draconian demands. A court ruling that came days ago stated that Ripple violated securities laws by selling XRP to institutional investors without proper registration.

Ripple vs. SEC: $10 million or $2 billion? Ripple first acknowledges the finding of the court and later its violation with detailed recognition of the decision and mentioning compliance changes. "Ripple has publicly acknowledged that ruling, and does so again now.". "It has altered its mode of selling XRP and changed its contracts in such a way to take out the problems identified by this Court," the document states. This becomes pertinent in light of the company's submission that there is no further need to resort to punitive measures such as an injunction.

The company, in a strongly worded response to the SEC, opposed the injunction, noting that it had made substantial changes to avoid a repeat violation. One of the crucial passages within the document states, "The SEC fails to establish a reasonable likelihood of future violations." That is based on its argument that Ripple pre-emptively took remedial steps effectively enough to take the risk out of repeating past mistakes.

The fintech company replied to the SEC's call for disgorgement, saying it is uncalled for since the SEC proved nothing that Ripple's actions led to pecuniary damage to the investors. The opposition states, "The SEC fails to establish that any disgorgement is warranted.". "Govil bars disgorgement because the SEC cannot show pecuniary harm." An important point that underlines and emphasizes the defense of Ripple further brings into view that the company has never done anything to financially injure its investors.

As for the civil penalties, Ripple recommends the amount to be much less since the penalties of the SEC request are disproportionate to other penalties in similar cases. "The document says that no civil penalty should be more than $10 million," which could speak to an amount that more closely resonates with precedent and the nature of the violations. Legal precedents play an immense role in defending, with a host of citations that aim at fortifying its position against stiff penalties. One of the legal precedents includes Arthur Lipper Corp. v. SEC. The Company is a case precedent that relates to the fact that the company does not require an injunction in its defense. It indicates that an injunction "serves to prevent threatened future harm" and requires "positive proof of a reasonable likelihood that past wrongdoing will recur"—something Ripple is contending is not present, considering that it had taken corrective action.

Reactions from the XRP Community

The Pro-XRP legal community responds to the news in a manner that denotes confidence and faith in the presented arguments.

A prominent lawyer, who advocates for XRP, said regarding the strength of Ripple's position against disgorgement: "In summary, I think this is a valid point, and that disgorgement should be awarded only where it would afford an injured party compensation but should not be awarded where it would give investors a windfall.". "Ripple looks in good shape for Torres to apply Govil and order no disgorgement.". What's more, Jeremy Hogan has argued for X: "The SEC has BIG legal problems to address if it wants to get a win against Ripple, and I still think it squandered its opportunity to get ahead with its first brief. James "MetaLawMan" Murphy explained what to expect next. He said Judge Torres hasn't set a deadline for deciding. "But I would expect that this decision will come substantially quicker than the summary judgment rulings.". Best guess: 60-90 days after the last brief (6 May).