- Ripple challenges SEC’s $2B penalty, proposing a $10M cap, arguing its current financial health is irrelevant to historical penalties.
- Ripple emphasizes confidentiality of past contracts, stating that revealing terms could unfairly benefit future counterparties.
- Ripple refutes SEC’s need for public disclosure of XRP prices, reinforcing that XRP is not a security as previously determined by the court.
Ripple Labs has strengthened its defense against the US Securities and Exchange Commission (SEC) by addressing two major points of argument. The most recent document was delivered to Southern District of New York Judge Analisa Torres. The SEC is pushing for fines close to $2 billion, which is significantly higher from Ripple’s proposed cap of $10 million.
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Andrew J. Ceresney, who is representing Ripple, expresses reservations in the letter to Judge Torres regarding the SEC’s claim that the court’s decisions on historical penalties should be impacted by Ripple’s current financial condition. The SEC believes that this information is crucial to the court’s decision-making regarding remedies pertaining to Ripple’s past conduct.
Ripple refutes this, stating that its financial health, assessed years after the alleged violations, is irrelevant to the case. According to the defense, Ripple’s financial stability is not in dispute and the court’s analysis should not be impacted by its current financial statements.
Due to changes in how XRP is sold, the second primary issue of objection addressed in the letter is the SEC’s claim that Ripple’s old contracts are no longer valid. The filing by Ripple’s CFO, Jonathan Billich, challenges the SEC’s argument of the documents as outdated information, contending that the terms of the contracts in question are still confidential and financially sensitive.
As Billich notes in his declaration, having access to the terms negotiated in previous contracts could give future counterparties significant leverage. Ripple states that the way it sells XRP has changed, and that the over-the-counter contracts that used to have conditions like discounts for sophisticated buyers are no longer in place.
The case has huge stakes, and Ripple’s defense strategy stresses that the SEC’s arguments are unrelated to the company’s previous contracts and current financial status. Ceresney argues that Ripple has a legitimate reason for protecting its private financial records, supporting the business’s right to confidentiality and commercial sensitivity.
Judge Torres will not rule on the remedies phase of the case until after Magistrate Judge Sarah Netburn has decided whether Andrea Fox is an expert or summary witness. The legal proceedings are coming to an end soon and major players in the industry are watching.
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