TL;DR

Ripple contends that the SECs proposed $2 billion penalty is excessive, suggesting a fine of no more than $10 million. The companys CEO anticipates a resolution by summer 2024, though the complex legal process could cause delays.

Ripples Arguments

The legal spat between Ripple and the US Securities and Exchange Commission (SEC) has been ongoing for more than three years, recently entering its trial phase. The lawsuit resolves around the regulators accusations that the company and some of its executives conducted an unregistered securities offering by selling its XRP token. 

Earlier this year, the SEC sought a $2 billion penalty on the firm alleging the aforementioned violations. Ripple did not welcome the idea, with chief legal officer Stuart Alderoty arguing the fine should not exceed $10 million. 

Most recently, the companys lawyers doubled down on the request, comparing the case with the one between the Commission and Terraform Labs. Recall that the defunct crypto firm agreed to pay a $4.47 billion fine for its fraudulent activity. The amount includes $3.6 billion in disgorgement, $466 million in prejudgment interest, and a $420 million civil penalty.

The defense said the SEC has previously agreed that civil penalties should range from 0.6% to 1.8% of the defendants gross revenue, claiming that Terraform Labs fits that pattern. As such, the attorneys concluded that an appropriate fine for Ripple would be no more than $10 million.

In addition, the lawyers noted that a jury in Manhattan found Terraform Labs and its co-founder Do Kwon liable on civil charges and recklessly orchestrating one of the largest securities frauds in US history. In contrast, they added, there are no direct allegations of fraud in the case between Ripple and the SEC.

Is the Lawsuit Nearing a Resolution?

Despite being in its trial stage, the legal battle may drag on for years due to the complexity of the process and possible delays and appeals from both parties. According to Ripples CEO Brad Garlinghouse, though, the resolution may occur as soon as this summer. 

My estimation is sometime before the end of the summer. Somebody asked me about the end of August, but I pointed out that September 21 is the end of the summer, he recently said.

Another person who believes the case may officially end in the next few months is the American lawyer Jeremy Hogan. He envisioned a $100 million settlement:

Im saying that the Judge will order 0 disgorgement but throws the SEC a bone and orders Ripple to pay a $100 million penalty.

Some might view the SEC as the underdog in the lawsuit, considering the companys three partial court wins secured throughout 2023. XRPs price reacted positively after each triumph, meaning a decisive victory may once again cause a substantial rally. Those willing to learn more about the legal battle and its impact on Ripples native token, feel free to take a look at our dedicated video below: