Ripple CLO Says US SEC Has Abandoned Its Absurd Demand for $2B

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As a researcher who has been closely following the Ripple Labs versus US SEC lawsuit, I cannot help but be intrigued by Stuart Alderoty’s latest take on the latest filing from the Securities and Exchange Commission (SEC). The past week has seen some dramatic developments, with the settlement announcement between the regulator and bankrupt Terraform Labs, followed by Ripple Labs’ notice of Supplemental Authority.

Following an eventful week in the legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC), Stuart Alderoty, Ripple’s Chief Legal Officer, has offered fresh insights into the SEC’s recent court submission.

Ripple Vs SEC Lawsuit: The Banter Over the Week

This week saw the commencement of a dramatic turn of events as Terraform Labs, currently in bankruptcy, reached an agreement with the regulatory body for a $4.47 billion settlement. However, recent assessments indicate that Terraform Labs may struggle to meet this substantial financial obligation.

In the latest turn of events, Ripple Labs has submitted a Supplemental Authority notice to challenge the court’s decision regarding the fine imposed by the SEC. The company maintains that the Securities and Exchange Commission, under the leadership of Gary Gensler, is infamous for imposing fines that bear little resemblance to the actual offense. Additionally, Ripple Labs has emphasized that the demanded penalty of $2 billion seems disproportionate when considering the trade volume involved in the lawsuit.

The Securities and Exchange Commission (SEC) has put forward a varied reasoning against this additional notice in their response. Initially, they pointed out that the amount they settled for with Terraform Labs, concerning the latter’s bankruptcy, was only $4.47 billion.

The Ripple Chief Legal Officer (CLO) Zeroed in on this point, objecting to the SEC’s perspective that Ripple’s lack of agreement amounted to wrongdoing. He reminded the court that Judge Analisa Torres had previously determined last year that XRP does not fall under the category of securities. Furthermore, he emphasized that during Ripple Labs’ sales of XRP, no victims were identified.

The SEC’s decision to adopt a less stringent settlement with Terraform Labs, given their impending business closure, raises concerns about potential inconsistency on the SEC’s part. To me, this seems indicative of questionable motives toward Ripple Labs and their flourishing enterprise.

$2 Billion Fine Subtly Struck Out

One aspect that particularly grabbed Stuart Alderoty’s interest was the contentions made by the SEC in their reaction to Ripple Labs’ filing. The regulatory body asserted that Ripple has yet to acknowledge any penalty agreement. Moreover, they suggested that Ripple ought to pay an additional $102.6 million beyond the $10 million it is contesting.

According to this development, the Ripple CLO expressed a sense of relief, stating that it appears the demanding party has dropped its unreasonable request for $2 billion.

The Securities and Exchange Commission (SEC) has shown strong opposition towards Ripple. In response, Ripple argued they had agreed to nothing in the ongoing legal battle. The court recently provided clarification that XRP does not classify as a security. Consequently, there are no individuals requiring compensation. Moreover, Ripple is experiencing significant growth, dealing a blow to the SEC. Fortunately for all parties involved, the SEC seems to have dropped its excessive demand for $2 billion.
— Stuart Alderoty (@s_alderoty) June 15, 2024

With the market anticipating a decision on the proposed remedies, the news of a potential payment in the ballpark of $100 million brings comfort to many parties involved.

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2024-06-16 20:30