As an experienced financial analyst, I believe that Ripple’s comparison of its penalty to Terraform Labs’ case raises valid concerns about the SEC’s inconsistent approach and potential bias in regulating cryptocurrencies. While the details of each case differ, it is essential to note that both companies were accused of distributing unregistered securities. However, the financial penalties suggested by the SEC vary significantly between Ripple and Terraform Labs.
Ripple Labs uses the SEC’s resolution with Terraform Labs as a point of reference in requesting leniency in the penalties imposed on it.
The Securities and Exchange Commission (SEC) originally demanded a penalty of $1.95 billion from Ripple for the suspected sale of unregistered securities. Yet, Ripple disagrees with this excessive fine and argues for its reduction to a more reasonable figure of $10 million.
Ripple Highlights SEC’s Disparate Approach Compared to Terraform Labs Case
Yesterday, a document labeled “Terra Form Notice of Supplemental Authority” was made public. In this filing, the defense lawyer referenced the $4.47 billion settlement between Terraform Labs as a pertinent comparison. They pointed out that regulatory bodies have agreed to impose civil penalties for comparable offenses, with resulting penalties ranging from 0.6% to 1.8% of the offender’s total revenues. Ripple’s proposed penalty of $10 million falls within this range.
Ripple strongly reiterated that unlike Terraform, it has not been involved in any fraud allegations. However, the securities regulator is levying harsher penalties against Ripple for allegedly distributing unregistered securities. The defense attorney remarked:
In analyzing Ripple’s opposition to the SEC’s proposed penalty, I’ve noticed that in similar instances, the SEC has agreed to civil penalties ranging between 0.6% and 1.8% of the defendant’s gross revenues (as pointed out in ECF No. 955 at pages 29-30). In contrast, the SEC is demanding a penalty that significantly surpasses this range for Terraform, despite the absence of fraud allegations and minimal losses suffered by Institutional Buyers.
As Bill Morgan, an XRP legal expert, expressed on his X page, he echoes my sentiments regarding the SEC’s seemingly biased stance towards Ripple. He highlighted that the commission accepted a penalty worth merely 1.27% of Terra’s total sales following a jury verdict declaring Terraform Labs guilty of one of the largest securities frauds in US history. In contrast, Ripple, with no fraud allegations mentioned, faces a fine amounting to $876 million from the regulator. Morgan questioned this inconsistency and raised concerns about the SEC’s motivations.
In a case where Ripple was not accused of fraud and institutional investors didn’t sustain any losses, the Securities and Exchange Commission (SEC) proposed a fine of $876 million against Ripple. This amount, as argued by Ripple, was reportedly twenty times greater than any other penalty imposed in crypto-related cases at that point.
XRP Price Keeps Struggling amid Ripple-SEC Issues
As a researcher, I’ve observed that XRP‘s price has persistently dropped, shedding over 10% in the last eight days. This coin has been oscillating between $0.45 and $0.55 since mid-April. Contrary to this trend, the prices of Bitcoin, Ethereum, and other significant altcoins haven’t followed suit. While they have experienced declines recently, their prices have risen in the past weeks.
As a researcher studying the cryptocurrency market, I’ve observed that XRP has been underperforming among the top cryptos. Unlike other coins that often follow bullish trends, XRP tends to deviate from such moves and instead experiences steeper declines when the market takes a downturn. The ongoing legal issues undoubtedly contribute to this negative sentiment surrounding XRP.
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2024-06-14 12:58