Ripple Cites Terraform Settlement in XRP Lawsuit Update Notice

Ripple Cites Terraform Settlement in XRP Lawsuit Update Notice

In favor of Terraform Labs, blockchain payment provider Ripple Labs Inc. has stated that the court should reject the settlement penalty imposed by the US Securities and Exchange Commission (SEC).

Ripple describes the SEC Settlement Request as Unreasonable

On June 12, the SEC demanded that Do Kwon, the founder of Terraform, pay $420 million in civil penalties and $3.58 billion in disgorgement.

Related articles

The settlement’s entire value is $4.47 billion. This request was made in place of claims that Kwon and his former company were accountable for misleading investors about their Bitcoin goods. Over time, Kwon’s dishonesty cost several investors over $40 billion in assets.

The court determined that Kwon and Terraform Labs were accountable for their willful and negligent orchestration of one of the worst securities frauds in US history.

But the $33 billion total sale of Terraform was very little represented by the SEC’s settlement demand—roughly 1.27%. The regulator’s settlement proposal is, therefore, completely irrational. As a result, Ripple submitted a notice of supplementary authority, citing instances in which the SEC had asked for much smaller settlements in more serious situations.

The crypto payments company claims that most of the Commission’s civil penalties typically fall between 0.6% and 1.8%, with 1.8% representing the worst and most heinous cases.

According to Ripple, Terraform Labs ought to fit neatly into this description. Several market experts have differing views that the SEC is going too far in the penalty range compared to the range observed throughout time. According to Ripple, there are no fraud claims in the Terraform Labs case, nor did institutional investors experience significant losses.

The Settlement for Terraform Labs Shouldn’t Be More Than $10 Million

According to Terraform Labs, the disgorgement charge and penalty should not exceed $10 million. The company’s balance sheet clarifies that it cannot afford such a high settlement cost. Terraform Labs, a bankrupt company, may only claim to have $75 million in assets under management (AUM).

Coinbase CLO Paul Grewal took issue with the Commission‘s insistence that Terraform Labs and Kwon pay such a settlement amount. He disapproved of the settlement’s efficacy and capacity to provide Terraform’s victims with workable solutions. He claims that a $7 million settlement fee will suffice.

It is important to remember that the results of this procedure may affect other litigation filed with the SEC about regulations, such as Ripple’s three-year-old complaint.

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

Sign Up for Our Newsletter!


Next Steps: Sync an Email Add-On

To get the most out of your form, we suggest that you sync this form with an email add-on. To learn more about your email add-on options, visit the following page ( Important: Delete this tip before you publish the form.

Related Posts