The US Securities and Exchange Commission (SEC) opposed Ripple's efforts to reduce the fines, stating that the firm “admitted nothing.”
The SEC rejected Ripple's request for lower fines in its lawsuit against the regulator, saying last week that the circumstances were different when determining penalties for Terraform.
Ripple, which has been in a legal battle with the SEC since 2020, compared the regulator's proposed $2 billion penalty for selling to institutional investors to penalties imposed on Terraform Labs in a “notice of additional jurisdiction” filed in New York district court on June 13.
However, the SEC argued on June 14 that Terraform and Ripple had different terms. SEC lawyers said, “Asking the court to tie the criminal decision in this case to the settlement in Terraform, Ripple stated that the corporate defendant here is in liquidation, is 'completely bankrupt', has burned the keys to all its cryptocurrency securities, and has agreed to return a significant amount to investors in these securities.” “He does not note that he did so and that he dismissed two of the board members responsible for the violations,” he said.
“Ripple is not accepting any of these damages, in fact, Ripple is not accepting any of them,” the SEC added.
Terraform agreed to pay $4.47 billion as part of a settlement with the SEC signed by a judge last week. The agreement includes barring Terraform co-founder Do Kwon from becoming an officer or director of any public company and barring them from engaging in transactions involving “cryptoasset securities.”
The SEC said in a statement on Friday that the fine amounts between the two companies are “an apples-to-pears comparison”:
“Ripple avoids comparing the penalty for the Terraform settlement to the gross profit of the violated conduct. The rate ($420 million/$3.58 billion) is significantly higher: 11.7%. This rate is less than the $876.3 million gross profit the SEC requested from the Court.” “When implemented, this results in a penalty of $102.6 million, which is a much larger figure than the $10 million cap that Ripple has insisted on.”
*This is not investment advice.