Ripple Labs Inc. is contesting a proposed $2 billion fine from the US Securities and Exchange Commission (SEC), arguing that the penalty is excessive and should be significantly reduced. The company's legal team points to the recent $4.5 billion settlement between the SEC and Terraform Labs, suggesting that a similar approach should be taken in their case.

Ripple's lawyers argue that the suggested fine is disproportionate, especially considering the lack of fraud allegations and minimal investor losses. They propose a penalty of around $10 million, a fraction of the original amount. This development is the latest in an ongoing legal battle between Ripple and the SEC, which began in December 2020.

The case has significant implications for the cryptocurrency industry, as it may set a precedent for digital asset classification and regulation. Ripple scored a partial victory earlier, with the judge ruling that their public sale of XRP did not violate security rules, while institutional sales did.

The SEC's lawsuit against Ripple has been closely watched by the cryptocurrency sector, with many interested in the potential outcome and its impact on the industry. Ripple's challenge to the proposed fine adds a new layer to the ongoing legal battle, as the company seeks to reduce the penalty and establish a precedent for future cases.

In the Terraform Labs settlement, the SEC imposed a permanent ban on co-founder and former CEO Kwon Do-hyung from holding certain corporate positions, in addition to the $4.5 billion fine. Ripple's legal team hopes to achieve a similar outcome, citing the similarities between the two cases.

As the legal battle continues, the cryptocurrency industry watches with bated breath, awaiting the outcome and its potential impact on digital asset regulation. Ripple's challenge to the SEC's proposed fine is a significant development in the case, and one that may have far-reaching implications for the industry.