The XRP community is buzzing with speculation regarding a possible settlement amount in the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC).
This speculation stems from the SEC’s recent filing that challenged Ripple’s proposed settlement figure of $10 million for alleged violations of securities laws.
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SEC Counters Ripple’s Settlement Proposal
In the recent response, the SEC moved to weaken Ripple’s argument for a significantly reduced penalty. The SEC highlighted key differences between the case against Ripple and previous enforcement action against Terraform Labs (TFL), the company behind the imploded Terra blockchain.
Ripple had previously referenced the $420 million penalty levied against TFL to support its case for a lower fine via a filing submitted to the Southern District of New York.
However, the SEC pointed out that TFL’s situation was distinct. Unlike Ripple, TFL is bankrupt and has ceased operations. Additionally, TFL agreed to significant investor compensation as part of its settlement agreement.
The SEC clarified that Ripple has not agreed to such terms, rendering the comparison irrelevant. Moreover, the SEC contested Ripple’s interpretation of TFL’s penalty amount. According to the SEC, the actual penalty constituted roughly 11.7% of TFL’s $3.5 billion in profits derived from its illegal conduct, not 1.27% as Ripple had argued.SEC’s Calculations Spark Speculation
The SEC’s argument regarding the 11.7% ratio has fueled speculation within the XRP community. Some community members suggest the SEC may be willing to reduce its initial $2 billion penalty demand against Ripple.
This speculation is further bolstered by the SEC’s emphasis on the disgorgement of $876.3 million in profits earned by Ripple through the alleged sale of unregistered securities. According to the SEC’s calculations, applying the 11.7% ratio to this figure results in a potential civil penalty of approximately $102.6 million.
XRP Price Target After Settlement
Based on the interpretation that the SEC is now seeking a $100 million settlement, some XRP community members believe a resolution is imminent. The founder of Humanitarian Trust Compliance Services predicts a final settlement amount between $50 million and $62.5 million.
Furthermore, he speculates that a settlement could propel the price of XRP to $1.375, up from its current trading price of around $0.492.
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Experts Caution Against Misinterpretations
While Ripple’s Chief Legal Officer, Stuart Alderoty, previously hinted that the SEC might have reduced its initial demand based on the recent filing, prominent XRP community figures like Moon Lambo have advised caution. They argue that a close examination of the SEC’s wording does not support this interpretation.SEC lawyer Marc Fagel agrees with this assessment, emphasizing that the idea of a reduced settlement amount is a misconception. The legal battle between Ripple and the SEC is ongoing, and the final settlement figure or court ruling is yet to be determined.
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