The U.S. Securities and Exchange Commission (SEC) has taken action in its separate legal battles with two major cryptocurrency companies: Ripple Labs and Terraform Labs. Here are the latest developments for the Ripple case and Terra…
Is the Ripple case coming to an end?
According to some experts, the lawsuit against Ripple Labs, the creator of the XRP token, appears to be close to reaching a conclusion. On April 22, Ripple filed its objection to the SEC’s proposed settlement, which includes $876 million in damages, $198 million in prejudgment interest, and a fine of the same amount. While Ripple accepts the court’s ruling that its sales of XRP violated Section 5 of the Securities Act, it opposes the SEC’s excessive demands. They propose a maximum fine of $10 million, arguing that there is no evidence of negligence or fraud in the SEC’s lawsuit and that the company has taken significant steps to comply with regulations. The main points are:
- Ripple argues that the SEC cannot prove “pecuniary harm” to investors and that legitimate business expenses must be deducted from the amount of any losses.
- Ripple believes a $10 million penalty is reasonable based on the SEC’s weak arguments and precedent in other crypto asset cases.
- Countering the SEC’s allegation of potential future violations, Ripple points to its efforts to improve compliance and obtain licenses for XRP sales outside the US.
Ripple CLO Stuart Alderoty criticized the SEC’s demands, calling them “intimidation against all cryptocurrencies in the US.” He expressed confidence that Judge Torres would make a fair decision at the final settlement stage. Meanwhile, information came from the SEC that 2 lawyers resigned in connection with the Debt Box case. This case was also a big event in the cryptocurrency field.
Penalty request for Terraform Labs
cryptokoin.com As we reported, just a few days ago, on April 19, the SEC filed a similar motion seeking serious penalties against Terraform Labs and its co-founder Do Kwon. The commission is seeking a staggering $4.7 billion in damages and pre-judgment interest, along with a significant $520 million fine split between Terraform ($420 million) and Kwon ($100 million). Now, new suggestions for penalties have been made by Terraform and Kwon:
- Terraform Labs proposed a much lower fine of $3.5 million.
- Facing a potential $100 million fine, Do Kwon sought a penalty of only $800,000.
Beyond financial penalties, the SEC recommended:
- Preventing Do Kwon from holding officer or director positions in companies that issue securities.
- Requiring full disclosure of banking accounts and assets.
- Implementation of “behavior-based action” on Terraform Labs to prevent future abuses.
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