Ripple Labs intensified its defense against the U.S. Securities and Exchange Commission (SEC) by countering the SEC’s staggering $2 billion penalty demand with a proposed cap of $10 million. Andrew J. Ceresney of Debevoise & Plimpton LLP, representing Ripple, addressed two key points in a letter to Judge Analisa Torres aimed at shifting the court’s perspective.
Ripple’s Core Arguments
One of Ripple’s core arguments opposes the SEC‘s claim that Ripple’s current financial status should influence past penalties. Ripple argues that its financial status assessed years after the alleged violations is irrelevant to the case. Emphasizing this point, Ripple insists that recent financial statements should not affect the court’s analysis, citing legal precedents and advocating for the confidentiality of financial documents for private companies.
Another contentious issue is the validity of Ripple’s past contracts, which the SEC considers outdated. Ripple’s CFO Jonathan Billich argues that as sales methods have evolved and current XRP sales do not reflect past conditions, disclosing these past contract terms could unfairly advantage future counterparties.
Securities Claim
Additionally, Ripple contests the SEC’s claim that the public disclosure of XRP prices is required under securities law, given that the court has already ruled that XRP is not a security. According to Ripple’s defense, this makes past contract prices irrelevant to registered securities.
As the legal battle progresses towards a resolution, Andrea Fox’s role as a summary or expert witness, as determined by Magistrate Judge Sarah Netburn, will remain pending before Judge Torres decides on the resolution phase.
Ripple’s detailed defense demonstrates its determination to protect its financial privacy and the confidentiality of past contracts. By highlighting the evolution of its sales methods and arguing that its current financial status is unrelated to past violations, Ripple aims to mitigate penalties and protect its commercial interests. The outcome of this high-profile case will have significant implications for the cryptocurrency industry and the regulation of crypto assets. As these developments unfold, XRP is trading at $0.51.
