XRP Massive $5 Price Breakout Nears As SEC Slashes Ripple’s Proposed Penalty From $2 Billion To $103 Million

XRP Colossal Breakout Nears As SEC Slashes Ripple’s Proposed Penalty From $2 Billion To $103 Million

The US Securities and Exchange Commission (SEC) has reduced its proposed fine against Ripple, the company behind the XRP Ledger blockchain, from $2 billion to $102.6 million, legal filings show.

Relief For Ripple 

The SEC had demanded that Ripple pay roughly $2 billion in disgorgement, prejudgement interest, and civil penalties while the San Francisco-based fintech firm has argued for no more than a $10 million fine.

To further bolster their case, lawyers for Ripple cited the recent settlement between the regulator and Terraform Labs in a note of supplemental authority. The legal team argued for a fair amount, noting that $2 billion is unreasonable. Ripple contended that the SEC had agreed to penalties between 0.6% and 1.8% of the defendant’s revenue in previous cases.

In its new letter to Judge Analisa Torres, dated June 14, 2024, the SEC claimed Ripple’s comparison is flawed and not applicable. The commission also argued that its $4.5 billion settlement with Terraform Labs and its co-founder Do Kwon was made because the firm was in bankruptcy and agreed to several relief measures, including burning its remaining tokens and firing leaders.

“Ripple is agreeing to none of this relief — in fact, Ripple is agreeing to nothing,” the SEC added.

The SEC concluded that it seeks to settle with Ripple for $102.6 million, which is deemed considerably lower than the previous $2 billion request but still considered vital to discourage future misconduct in the crypto market. 

One Of Crypto’s Lengthiest Legal Battles

Ripple’s case with the SEC has been ongoing since December 2020, when the regulator alleged the blockchain company used XRP as an unregistered security to raise $1.3 billion. The case led to a game-changing legal precedent when, in July 2023, Judge Analisa Torres found Ripple violated federal securities laws by selling to institutional buyers but dismissed similar allegations by the SEC that the sale of XRP on exchanges and via algorithms also violated the law.

The SEC later moved to voluntarily drop charges against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen in October 2023, noting at the time it planned to discuss remedies with the blockchain payments startup.

The protracted lawsuit has notably suppressed the price of XRP despite a slew of high-profile partnerships by Ripple, growth in adoption, and the emergence of dozens of applications on the XRP Ledger. XRP is the seventh largest crypto asset with a market cap of $27.7 billion, according to CoinGecko. The coin’s price currently stands just above $0.4966, effectively flat over the past 24 hours.

Ripple’s ex-director Sean McBride recently posited that XRP will only skyrocket after the cloud of the SEC lawsuit that has hung over the coin for over three years clears. Analysts are citing a $5 price breakout in the wake of this eventuality.

Everyone will be caught off guard by #XRP. The 7-year ordeal has ended.

Very soon. pic.twitter.com/3GrVUUH87U

— Amonyx (@amonbuy) June 14, 2024

It’s unclear when Judge Analisa Torres will rule on the remedies. However, Ripple’s Garlingouse tips a conclusion by September 21, as ZyCrypto reported.