Ripple Labs criticizes SEC's $2 billion fine as too excessive, citing Terraform's settlement as a reference: a $10 million fine would be just right.

The Block reported that Ripple Labs, which has been in a long-standing legal battle with the U.S. Securities and Exchange Commission (SEC), strongly opposed the proposed $2 billion fine in court documents filed on Thursday. Citing the judgment in the Terraform settlement on Wednesday, Ripple argued that a fine not exceeding $10 million would be more reasonable.

SEC Scores a Victory: Court Rules Ripple Must Pay $1.95 Billion, Permanently Bans Institutional Sales

Ripple Labs Cites Terraform's $4.5 Billion Settlement

According to a "Notice of Supplemental Authority" filed by Ripple Labs on the 13th, the company compared the $2 billion fine proposed by the SEC against them with the $4.5 billion fine imposed on Terraform Labs and raised objections.

The filing stated that the civil penalties sought by the SEC against Ripple are significantly unreasonable in light of the civil penalties sought in the Terraform case.

The document noted that despite Terraform Labs and its CEO Do Kwon causing over $40 billion in losses to global investors, they are facing only approximately a $4.5 billion civil penalty.

Terraform Settles with SEC for $4.5 Billion, Do Kwon to Pay $200 Million Personally

Previously, lawyers for Terraform and Do Kwon had also negotiated down the SEC's claimed $5.3 billion civil penalty, suggesting that a maximum penalty of $1 million would suffice.

Ripple Criticizes Fines as Unreasonable: $10 Million Would Suffice

In response, Ripple's attorneys stated:

In similar cases, SEC fines typically range from 0.6% to 1.8% of the defendant's total revenue. Given that SEC alleges that Ripple raised $1.3 billion in revenue through the sale of XRP, we suggest a more reasonable fine for Ripple, up to a maximum of $10 million.

The attorney also mentioned that Terraform and its founder Do Kwon are accused of civil fraud; whereas Ripple does not face any fraud-related charges, and institutional investors have not suffered any losses as a result:

Therefore, the court should reject the SEC's disproportionate and unfounded demands.

This position was also supported by legal expert Bill Morgan, who believes that the SEC's penalty request this time is untenable:

The supplemental authority filed yesterday once again highlights the SEC's long-standing strange animosity towards Ripple.

SEC vs. Ripple: A Tale of Conflict

As the SEC's lawsuit against Ripple enters its fourth year, the SEC submitted its final response in the remedial stage of the lawsuit last month, which may set a precedent for the treatment of cryptocurrencies under U.S. securities laws in September of this year.

Ripple's Legal Battle with the SEC Nears Conclusion, Result Expected in September

Despite the years-long litigation, Ripple continues to develop new products and expand its business, including acquiring digital asset custodian Standard Custody and launching the new stablecoin $RLUSD.