Ripple vs SEC Lawsuit: Can $2B Fine Be Reduced? Will Terraform Labs Settlement Influence Outcome?
Is the SEC's Penalty Too High?
Blockchain payment platform Ripple Labs Inc. has voiced its opinion on the Terraform Labs settlement case, arguing that the proposed penalty by the United States Securities and Exchange Commission (SEC) is unrealistic.
Ripple Describes SEC Settlement Request as Unreasonable
Excerpt from Judge Rakoff’s order on Kwon’s penalties and fines. Source: PACER
On June 12, the SEC demanded that Terraform Labs and its founder, Do Kwon, pay $3.58 billion in disgorgement and $420 million in civil penalties. The total settlement amount of $4.47 billion stems from allegations that Kwon and his company misled investors about their cryptocurrency products, resulting in losses of approximately $40 billion.
Court Findings on Terraform Labs and Do Kwon
The court ruled that Terraform Labs and Do Kwon were guilty of intentionally and recklessly committing one of the biggest securities frauds in U.S. history. This judgment has significant implications for the cryptocurrency industry and investor protection.
Ripple's Argument Against the SEC's Demands
Ripple Labs thinks the SEC's demand is way too high. They argue that the requested settlement, which is about 1.27% of Terraform's $33 billion gross sales, is unreasonable. Ripple even pointed out that the SEC has asked for much lower settlements in worse cases before, making this one seem unfair.
Why It Matters
Ripple Labs stepping into this case shows the ongoing debate over how much regulatory penalties should be in the cryptocurrency industry. By challenging the SEC's settlement amount, Ripple is highlighting the need for fair and consistent rules that everyone can follow.
In the end, Ripple’s involvement in the Terraform Labs case is a reminder of the complexities and challenges in regulating the rapidly evolving world of cryptocurrency.
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